Profit-taking seen in Gulf stock markets after rise

UAE markets are seen easing from 2009 highs on Monday as investors book profits from a recent rally.

Other Gulf Arab markets are seen struggling to advance in the absence of major regional and international catalysts, with US and Japan exchanges closed for holidays.

"I'm expecting the markets to correct today after several days of gains – stocks were largely flat yesterday and didn't break new levels so I see some consolidation coming in," says Vyas Jayabhanu, head of investments, Al Dhafra Financial Broker.

"People are trading on technicals in the absence of any breaking news."

Jayabhanu says the Dubai index could drop 5 per cent over the next few days, although such a fall would be seen as an opportunity to accumulate at lower levels.

"It's nothing drastic – there's a lot of optimism, with most stocks breaking above resistance key levels recently, especially Emaar Properties –when it broke and held above Dh4.25 it boosted other stocks," adds Jayabhanu.

"Emaar is shouldering Dubai and Aldar Properties is shouldering Abu Dhabi."

Dar Al-Arkan, Saudi Arabia's largest property developer by market capitalisation, could see a surge in trading after the firm announced plans for a $2 billion residential project in Jeddah.

The Dubai, Abu Dhabi, Saudi Arabia and Oman indexes all hit 2009 closing highs on Sunday, buoyed by rising optimism that the worst of the financial crisis is over and a strong performance by global markets on Friday.

Liquidity is rising, with turnover on the Dubai, Abu Dhabi and Kuwait increasing by more than 20 per cent on Sunday.

But Asian stocks are subdued in early Monday trading, with Korean stocks pulling down the other markets that are open.

Oil is up 0.8 per cent at $72.34 a barrel at 0500 GMT, while the dollar is rallying from a 14-month low against the euro.