Most stock markets in the Gulf ended lower on Sunday on expectations of an Israeli retaliation to Iran's attack and an escalating conflict in Lebanon, although the Saudi index bucked the trend to close higher.

Tensions were rising with the prospect of a retaliation against Iran, continued violence in Gaza and Israel's relentless push against Hezbollah in Lebanon.

The Qatari benchmark index <.QSI> dropped 0.2%, hit by a 0.4% fall in Qatar Islamic Bank <QISB.QA>.

Saudi Arabia's benchmark index <.TASI> gained 0.6%, led by a 0.8% rise in aluminium products manufacturer Al Taiseer Group <4143.SE>.

On Friday, a reading on U.S. inflation and consumer confidence kept expectations for the path of Federal Reserve interest rate cuts intact.

Markets had been fully pricing in a cut of at least 25 basis points (bps) with a chance for another outsized 50 bps cut.

Monetary policy in the Gulf Cooperation Council (GCC) often aligns with the Fed's decisions as most of the regional currencies are pegged to the U.S. dollar.

Outside the Gulf, Egypt's blue-chip index <.EGX30> retreated 2.6%, as most of its constituents were in negative territory including El Sewedy Electric <SWDY.CA>.

The International Monetary Fund's fourth review of Egypt's $8 billion loan has been delayed until after the IMF's annual meetings, Prime Minister Mostafa Madbouly said on Wednesday.

SAUDI ARABIA

<.TASI> rose 0.6% to 12,069

QATAR

<.QSI> lost 0.2% to 10,493

EGYPT

<.EGX30> lost 2.6% to 29,954

BAHRAIN

<.BAX> eased 0.1% to 1,998

OMAN

<.MSX30> rose 0.3% to 4,766

KUWAIT

<.BKP> down 0.1% to 7,573

(Reporting by Ateeq Shariff in Bengaluru; Editing by Ros Russell)