Most stock markets in the Gulf ended lower on Sunday on expectations of an Israeli retaliation to Iran’s attack and an escalating conflict in Lebanon, although the Saudi index bucked the trend to close higher.

Tensions were rising with the prospect of a retaliation against Iran, continued violence in Gaza and Israel’s relentless push against Hezbollah in Lebanon.

The Qatari benchmark index dropped 0.2%, hit by a 0.4% fall in Qatar Islamic Bank.

Saudi Arabia’s benchmark index gained 0.6%, led by a 0.8% rise in aluminium products manufacturer Al Taiseer Group.

On Friday, a reading on U.S. inflation and consumer confidence kept expectations for the path of Federal Reserve interest rate cuts intact.

Fertiglobe boosts Abu Dhabi, Dubai extends gain

Markets had been fully pricing in a cut of at least 25 basis points (bps) with a chance for another outsized 50 bps cut.

Monetary policy in the Gulf Cooperation Council (GCC) often aligns with the Fed’s decisions as most of the regional currencies are pegged to the U.S. dollar.

Outside the Gulf, Egypt’s blue-chip index retreated 2.6%, as most of its constituents were in negative territory including El Sewedy Electric.

The International Monetary Fund’s fourth review of Egypt’s $8 billion loan has been delayed until after the IMF’s annual meetings, Prime Minister Mostafa Madbouly said on Wednesday.

SAUDI ARABIA rose 0.6% to 12,069

QATAR lost 0.2% to 10,493

EGYPT lost 2.6% to 29,954

BAHRAIN eased 0.1% to 1,998

OMAN rose 0.3% to 4,766

KUWAIT down 0.1% to 7,573