Most major stock markets in the Gulf rose in early trade on Wednesday after cooling U.S. inflation lifted expectations the Federal Reserve would slow its pace of interest rate hikes.

U.S consumer prices marked their smallest annual increase in inflation in nearly a year, climbing 7.1% on a year-on-year basis in November, following a 7.7% rise in October.

U.S. Federal Reserve policymakers are expected to raise interest rates by 50 basis points on Wednesday, slowing from the 75-basis-point pace they had stuck to in meetings since June.

The Fed's policy decision is due at 1900 GMT, followed by a news conference.

Saudi Arabia's benchmark index advanced 1.6%, on course to extend gains from the previous session when it rebounded from a 20-month low, buoyed by a 2.7% rise in Al Rajhi Bank.

Most Gulf currencies are pegged to the dollar and Qatar, Saudi Arabia and the United Arab Emirates usually mirror any monetary policy change in the United States.

In Qatar, the index added 0.2%, helped by a 1.1% rise in Qatar Islamic Bank.

Qatar - the Gulf Arab state hosting the soccer World Cup - posted a budget surplus of 30 billion riyals ($8.19 billion) for the third quarter of 2022, boosted by rocketing oil and gas revenues, the state news agency said on Tuesday, citing data from the finance ministry.

The Abu Dhabi index gained 0.4%, on track to snap seven sessions of losses.

Dubai's main share index bucked the trend to trade 0.3% lower.

Oil prices - a catalyst for the Gulf's financial markets - fell after industry data showed a surprise build in U.S. crude inventories against analysts' forecast of a decline, reinforcing fears about weakening demand even as supply tightens. (Reporting by Ateeq Shariff in Bengaluru; editing by Barbara Lewis)