Mideast Stocks: Gulf bourses mixed on weak oil, ahead of Fed rate decision

Stock markets in the Gulf ended mixed on Tuesday following a decline in oil prices as investors awaited the outcome of the U.S. central bank's meeting.

Crude prices - a catalyst for the Gulf's financial markets - hit their lowest levels since early June over concerns about Chinese demand and as the market shrugged off the risk of conflict escalating in the Middle East.

A raft of disappointing economic news out of China has shaken markets recently. China's manufacturing activity likely shrank for a third month in July, a Reuters poll showed on Monday.

Saudi Arabia's benchmark index <.TASI> dropped 0.5%, with aluminium products manufacturer Al Taiseer Group <4143.SE> declining 4% and oil giant Saudi Aramco <2222.SE> retreating 0.9%.

Dubai's main share index <.DFMGI> dropped 0.6%, weighed down by a 7.2% decline in Mashreqbank <MASB.DU> and a 1.7% decrease in utility firm Dubai Electricity and Water Authority <DEWAA.DU>.

However, Dubai Financial Market <DFM.DU>, which operates the Dubai exchange, advanced 1.6% after reporting a higher quarterly net profit.

In Abu Dhabi, the index <.FTFADGI> finished flat.

Markets are pricing almost no chance of a U.S. rate cut this week but, having fully priced a 25-basis-point reduction in September, expect dovish comments from Fed policymakers in its two-day meeting that ends on Wednesday. FEDWATCH

Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed's decisions as most regional currencies are pegged to the U.S. dollar.

In Qatar, the index <.QSI> dropped 0.2%, with telecom operator Ooredoo <ORDS.QA> losing 1.1%, ahead of its earnings announcement.

Outside the Gulf, Egypt's blue-chip index <.EGX30> gained 0.5%, led by a 1.7% rise in Talaat Mostafa Group <TMGH.CA>.

The International Monetary Fund said on Monday it had completed a review allowing Egypt to draw $820 million, saying efforts to restore macroeconomic stability had started to yield results but urging more progress on reining in state-owned enterprises.

(Reporting by Ateeq Shariff in Bengaluru; Editing by Shailesh Kuber)