Most Gulf stock markets closed lower on Tuesday, as falling oil prices and expectations of an interest rate hike by the U.S. Federal Reserve subdued investor sentiment, while Abu Dhabi bucked trend.

Oil prices - a key catalyst for the Gulf's financial markets - slipped by more than 1% on Tuesday with March Brent crude futures 1.25% lower at $83.97 a barrel by 1414 GMT. Investors expect the Federal Reserve will raise rates by 25 basis points on Wednesday, and any deviation from that script would be a real shock.

Most Gulf currencies are pegged to the U.S. dollar, and Saudi Arabia, the United Arab Emirates and Qatar usually mirror U.S. monetary policy changes.

The benchmark index in Saudi Arabia lost 0.2%, extending losses into a second session. The index was weighed down by a 1.8% loss in Saudi Basic Industries and a 0.2% fall in luxury real estate developer Retal Urban Development. Meanwhile, the Gulf's second-largest economy Saudi Arabia grew by 5.4% in the fourth quarter of 2022, according to initial government estimates, down from 8.8% annual growth in the previous quarter.

In Abu Dhabi, the index rose 0.1%, helped by a 5.7% gain in Abu Dhabi Islamic Bank, which saw it highest intra-day rise since July. Abu Dhabi's biggest Sharia-compliant lender reported a surge in quarterly net profit, supported by broad-based income momentum across all its operating businesses.

Dubai's benchmark index dropped marginally, weighed down by losses in financial and heavyweight real estate sectors with Dubai Islamic Bank declining 3% and Emaar Properties falling 0.7%. The Qatari Stock index dropped 1.7%, with most of its constituent stocks in negative territory.

"Milder winters are affecting the demand for energy in Europe and the US, and could fuel pressures on the Qatari market," said Farah Mourad, Senior Market Analyst of XTB MENA.

The Gulf's biggest lender Qatar National Bank continued its slide, falling 3% and Masraf Al Rayan fell for a third consecutive session, sinking 5.5% on weak earnings. The lender reported a more than 22% slump in full-year net profit on Sunday.

Outside the Gulf, Egypt's blue-chip index ended down 3.4%, extending losses into a second session with almost all its constituent stocks in the red. Commercial International Bank and E-Finance dropped 5.7% and 6.1% respectively.

  • SAUDI ARABIA fell 0.2% to 10,793
  • QATAR dropped 1.7% to 10,932
  • EGYPT declined 3.4% to 16,446
  • BAHRAIN lost 0.01% at 1,928
  • OMAN fell 1% to 4,704
  • KUWAIT ended flat at 8,085
  • ABU DHABI rose 0.1% to 9,812
  • DUBAI ended flat at 3,303

(Reporting by Md Manzer Hussain; Editing by Christina Fincher)