MIDEAST STOCKS-Most Gulf markets gain on US rate cut hopes

By Ateeq Shariff

Dec 7 (Reuters) - Most stock markets in the Gulf ended higher on Sunday, buoyed by growing expectations of a U.S. Federal Reserve interest rate cut next week.

Investors absorbed the latest U.S. inflation data and adjusted their bets, strengthening expectations for a Federal Reserve rate cut at the December 9-10 policy meeting.

U.S. consumer spending rose only modestly in September, following three months of robust growth, pointing to waning economic momentum late in the third quarter as a sluggish job market and elevated living costs restrained household demand.

Traders are now assigning an 87% probability, based on CME Group's FedWatch Tool, to a 25-basis-point rate cut by the Federal Reserve next week.

Saudi Arabia's benchmark index .TASI edged 0.1% higher, helped by a 2.6% rise in Riyad Bank 1010.SE.

Oil prices rose nearly 1% on Friday to a two-week high, supported by expectations of a U.S. rate cut next week and geopolitical risks that could curb supplies from Russia and Venezuela.

In Qatar, the index .QSI, however, eased 0.1%.

Outside the Gulf, Egypt's blue-chip index .EGX30 gained 0.6%, with Beltone Financial Holding BTFH.CA advancing 6.9%.