By Ateeq Shariff
Most Gulf stock markets closed higher on Tuesday as investor optimism over potential U.S. interest rate cuts and steady oil prices eclipsed concerns over the U.S. government shutdown.
As the shutdown extends into its second week, investors are turning to private and alternative economic data to gauge the U.S. interest rate trajectory, with a 25 basis point rate cut at this month's policy meeting appearing nearly fully priced in.
The Fed's stance carries heavy clout in the Gulf, where most currencies are pegged to the U.S. dollar, anchoring regional monetary policy.
Dubai's main share index DFM:DFMGI rose 0.5%, with top lender Emirates NBD DFM:EMIRATESNBD advancing 2.6%.
In Abu Dhabi, the index ADX:FADGI finished 0.2% higher.
Oil prices - a catalyst for the Gulf's financial markets - were steady as investors weighed a smaller than expected increase to OPEC+ output in November against a backdrop of possible oversupply.
The Qatari index QSE:GNRI added 0.2%, supported by a 0.8% gain in Qatar Islamic Bank QSE:QIBK.
Market participants also assessed U.S. President Donald Trump's plan to end the two-year Gaza conflict, seeking relief from persistent geopolitical strains.
Saudi Arabia's benchmark index TADAWUL:TASI, however, fell 0.2%, snapping two sessions of gains, hit by a 1.8% fall in Saudi Arabian Mining Company TADAWUL:1211.
Outside the Gulf, Egypt's blue-chip index EGX:EGX30 finished flat.
Egypt's annual headline inflation rate is expected to have decreased for a fourth month running in September to 11.0%, extending a two-year downward trend, a Reuters poll found.
Saudi Arabia
TADAWUL:TASI fell 0.2% to 11,583
Abu Dhabi
ADX:FADGI added 0.2% to 10,082
Dubai
DFM:DFMGI rose 0.5% to 5,940
Qatar
QSE:GNRI gained 0.2% to 10,912
Egypt
EGX:EGX30 ended flat at 37,097
Bahrain
BAHRAIN:BHBX was up 0.5% to 1,976
Oman
(.MSX30) eased 0.1% to 5,181
Kuwait
(.BKP) rose 0.4% to 9,319