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Gaza ceasefire gains in the Gulf on hopes of US rate cuts

Oct. 9 - Stock markets in the Gulf region rose early on Thursday, supported by the hope of more U.S. rate cuts in this year as well as a possible ceasefire in Gaza to ease geopolitical tensions.

On Wednesday, market participants applauded Israel's and Hamas's agreement to the first phase in U.S. president Donald Trump’s plan for Gaza. The deal could lead to the end of a two-year war that has ravaged the Middle East.

Saudi Arabia's benchmark stock index rose 0.3%. This was mainly due to a 0.8% increase at Al Rajhi Bank, and a 1,1% rise at Saudi Arabian Mining Company.

A top minister announced on Tuesday that Peru is seeking major investments from Saudi Arabia, as well as the U.S. oil company Chevron, to develop its energy and mining resources. This is part of a broader strategy to revitalize this sector.

Dubai's main stock index rose 0.2%, while toll operator Salik Company gained 2.7%.

Federal Reserve officials acknowledged that the risks facing the U.S. employment market were sufficiently high to justify a rate reduction, but they remained cautious due to stubborn inflation. The minutes of their September 16-17 meeting, released on Wednesday, reflect this.

According to the CME FedWatch, markets are pricing in 25 basis-point cuts in both October and December with probabilities of respectively 93% and 78%.

The Fed's position has a lot of weight in the Gulf region, where the majority of currencies are pegged with the U.S. Dollar, thereby anchoring the regional monetary policies.

The index in Abu Dhabi was up by 0.1%. The gains were however limited due to losses at Abu Dhabi National Oil Company (ADNOC) listed subsidiary ADNOC Drilling, which fell 3.8%.

ADNOC, the state-owned oil company of Abu Dhabi, announced on Wednesday that it will pay out 158 billion dirhams (43.02 billion dollars) in dividends to its six publicly-listed subsidiaries by 2030.

Qatar Gas Transport added 1.2% to the Qatari index.

(source: Reuters)