News

Feb 1 (Reuters) - Stock markets in the Gulf ended mixed on Thursday as the U.S. Federal Reserve signalling a possible start to interest rate cuts, while escalating tensions in the region weighed on investor sentiment.

The Federal Reserve committee's decision to hold rates at 5.25%-5.5% on Wednesday was no surprise, but it emphasised that rates would not be cut until it had more confidence that inflation was truly beaten.

At a press conference, Fed Chair Jerome Powell flatly stated a cut as early as March seemed unlikely, but also conceded that everyone on the committee was looking to ease this year.

Most Gulf Cooperation Council countries, including the United Arab Emirates (UAE), peg their currencies to the U.S. dollar and follow the Fed's policy moves closely.

Saudi Arabia's benchmark index .TASI gained 1%, snapping a three-day losing streak, with Al Rajhi Bank 1120.SE advancing 2.4% and the country's biggest lender Saudi National Bank 1180.SE closing 1.4% higher.

Brent crude futures LCOc1 were up 68 cents at $81.23 a barrel by 1140 GMT.

The Qatari benchmark .QSI dropped 0.4%, hit by a 1% fall in Qatar Islamic Bank QISB.QA and a 2.1% decrease in Islamic lender Masraf Al Rayan MARK.QA.

In the Middle East, worries over attacks by Yemen-based Houthi forces on shipping in the Red Sea are driving up costs and disrupting global oil trading. The Houthi group also said it would keep up attacks on U.S. and British warships in what it called acts of self defence.

In Abu Dhabi, the index .FTFADGI finished 0.4% lower, hit by a 3.7% slide in the UAE's biggest lender First Abu Dhabi Bank (FAB) FAB.AD despite a sharp rise in quarterly earnings.

FAB said net profit surged 63% to 4.01 billion dirhams ($1.09 billion) for the quarter ended Dec. 31, beating analysts' average estimate of 3.6 billion dirhams.

Dubai's main share index .DFMGI advanced 1.2%, with blue-chip developer Emaar Properties EMAR.DU rising 1.5%.

Outside the Gulf, Egypt's blue-chip index .EGX30 added 0.5%.

The International Monetary Fund said on Wednesday it was making progress in talks with Egypt on how to resume disbursements of a $3 billion loan, after a sharp slide in the currency on the black market increased the urgency for an agreement.

SAUDI ARABIA

ABU DHABI

.FTFADGI fell 0.4% to 9,470

.QSI dropped 0.4% to 10,049

BAHRAIN

.BAX was down 0.1% to 2,067

.BKP eased 0.5% to 7,918

($1 = 3.6724 UAE dirham)

(Reporting by Ateeq Shariff in Bengaluru Editing by Mark Potter)

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