MIDEAST STOCKS-Middle East equities rise amid bargain hunting; Saudi nears two-year low

By Amna Mariyam

Sept 14 (Reuters) - Most Middle East stock markets edged higher on Sunday as investors bought up recently sold-off shares, supported by a rebound in global risk appetite after a softer U.S. labor report fueled rate cut bets, while Saudi's bourse approached a two-year low.

Saudi Arabia's benchmark index .TASI fell 0.2% in a quiet session, extending a recent slide toward a two-year low, with most sectors closing in the red.

Index heavyweight Al Rajhi Bank 1120.SE, the world's largest sharia-compliant lender, and ACWA Power 2082.SE lost 0.4% and 2.7% respectively.

Elsewhere, the state's oil giant Aramco 2222.SE finished the session 0.1% higher, recovering from its lowest level seen in over five years in the previous session.

Crude - a key catalyst to Gulf economies - inched higher after a Ukrainian drone attack disrupted operations at Russia's key western port, but gains were capped by concerns over soft U.S. jobs data and rising inflation clouding the demand outlook.

Qatar's benchmark index .QSI rose 0.4%, with financials leading the gains amid renewed investor confidence.

Qatar Islamic Bank QISB.QA climbed more than 1%.

Investors continue to keep a close watch on the U.S. Federal Reserve as softer job data solidified expectations of a rate cut on Wednesday, with bets growing for additional cuts in October and December.

The Fed's stance carries heavy clout in the Gulf, where most currencies are pegged to the U.S. dollar, anchoring regional monetary policy.

Outside the Gulf, Egypt's blue-chip index .EGX30 advanced 0.5%, building on gains from the past two sessions, supported by broad-based sectoral strength.

Orascom Construction ORAS.CA jumped 4.7% after debuting its primary listing on Abu Dhabi’s main index .FTFADGI on Thursday, while retaining its secondary listing on the Egyptian exchange.