Gulf stock markets track gains

Dubai's bourse recouped early-session losses to surge to an eight-month closing high, but analysts warned the rally may be over-extended, while Abu Dhabi's benchmark also ended higher.

Dubai's index climbed 1.7 per cent to 1,596 points, its highest close since June 19.

Bellwether Emaar Properties jumped 3 per cent, Dubai Financial Market, the only listed Gulf Arab bourse, rose 2.4 per cent.

"The next target is the 1,600 resistance area, which matches a long-term trend line resistance," says Bruce Powers, head of research and analysis at Trust Securities.

"Some pullback or consolidation would be healthy at this point, before continuing higher."

Small-caps surged, with National Central Cooling was up 6.9 per cent and Dubai Investments rose 12.5 per cent.

Powers warns Dubai's long-term bear market has not reversed yet and its early-year rally is unsustainable. Dubai's index fell 17 per cent in 2011 and remains 75 per cent below a 2008 peak despite recent gains.

"I'm watching for a close above 1,600 before saying that the market is starting to recovery to a degree where it will continue to trend higher," Powers adds.

In Abu Dhabi, the benchmark climbed 0.9 per cent to 2,527 points, rose for a third day to reach a 20-week closing high.

Telecom operator Etisalat was the main support, rose 2.2 per cent. The firm's board proposed a 60 per cent dividend for 2011 after market close on Monday.

Bank stocks gain in Qatar

Qatar's index rallied for a third session, was up 0.4 per cent to 8,681 points, trimming 2012 losses to 1.1 per cent.

Banks supported, Commercial Bank of Qatar gained 1.9 per cent, Doha Bank rose 1.4 per cent and Qatar International Islamic Bank was up 0.9 per cent.

"From a perspective of westerns institutional investors that are heavily allocated in Qatar, there has to be fresh news flow," says Julian Bruce, EFG-Hermes director of institutional equity sales. "Additional allocation at this point is unlikely."

Petrochemical stocks gain in Saudi

Saudi Arabia's bourse rallies for a fourth-straight session, hitting a 40-month high with heavyweight stocks supporting the index as local buying momentum continues.

The kingdom's benchmark rose 0.5 per cent to 6,940 points, its highest level since October 2008.

Bellwether Saudi Basic Industries Corp (Sabic) rose 1 per cent and most petrochemical stocks were also up as gains in oil prices supported.

Brent crude futures held steady near $120 a barrel on Tuesday as the euro zone approved a second bailout package for debt-laden Greece, while a cut in Chinese and European imports of Iranian oil supported prices.

National Industrialisation gained 1 per cent and Saudi Kayan Petrochemical climbed 0.6 per cent.

Banks also gained with regional heavyweight Al Rajhi Bank rose 1 per cent.

Cash dividend proposals are also boosting buying. Saudi Steel Pipes gains 1.5 per cent. Its board suggested a cash dividend of 0.75 riyals per share for the second half of 2011.

Arabian Cement proposed a dividend of 2 riyals ($0.53) per share for the same period. Shares in the firm were up 1.8 per cent.

Elsewhere, Oman's index ended 0.2 per cent lower at 5,667 points, while Kuwait's benchmark slipped 0.4 per cent to 6,093 points, down from Monday's seven-month closing high.