Gulf markets may gain on technicals, positive global backdrop

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Most regional bourses look set to gain on Monday after Sunday's rises broke some key technical resistances, and because of a positive global backdrop. But estimate-trailing earnings in Qatar may weigh on that market.

Australian shares climbed to a five-year peak on Monday as investors bet the U.S. Federal Reserve would put off winding back its cheap money policies until next year. Most Asian markets are firm.

This will allow retail investors in the Gulf to continue buying the upward momentum. Dubai hit a new five-year high on Sunday, breaking above its early October peak, while Saudi Arabia's 1.9 percent rise to 8,133 points broke a month-long sideways trend, targeting the August peak of 8,223 points in the short term.

Saudi Kayan Petrochemical's 9.6 percent jump on Sunday, after the company swung to a third-quarter profit, appeared to signal at least a short-term rerating of petrochemical shares which looks likely to continue.

Parent firm Saudi Basic Industries Corp (SABIC) jumped 5.4 percent to 103.25 riyals, breaking resistance on its August peak; this leaves no major chart barrier before the 2012 peak of 110 riyals.

In Qatar, however, banks may open weaker after a second lender missed analysts' estimates for third-quarter profit.

Qatar Islamic Bank (QIB), the Gulf state's fourth-largest lender by market value, reported a 12.4 percent drop in third-quarter net to 345.1 million riyals ($94.8 million), trailing the average forecast of eight analysts in a Reuters poll who had expected 360 million riyals.

Earlier this month Qatar National Bank, the region's largest lender by market capitalisation, also missed its quarterly earnings estimate.

However shares in QIB are already down 10 percent year-to-date, underperforming the index which is up 16.7 percent, so selling pressure on the stock may be limited.

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