Weak global cues; Gaza-Israel conflict intensifies

Gulf investors are likely to remain risk averse on Wednesday as air strikes in Gaza intensify, while truce talks continue and global cues are weak as Asian shares ease.

Israeli air strikes shook the Gaza Strip and Palestinian rockets struck across the border as US Secretary of State Hillary Clinton held talks in Jerusalem in the early hours of Wednesday, seeking a truce that can hold back Israel's ground troops.

Gulf markets were steady on Tuesday but investors remained cautious due to the conflict.

Dubai's index gained 0.8 percent to 1,591 points on Tuesday, but analysts remain bearish until the market recovers to 1,630 points.

Neighbouring Abu Dhabi's benchmark closed flat at 2,661 points. "The index is testing support at 2.655," MENA Corp says in a note. "We are waiting to see reversal signals in order to reinstate [buy] positions. Next important support is the 2,630 level."

In Saudi Arabia, petrochemical stocks may come under pressure after Saudi Industrial Investment Group (SIIG) highlighted fears of a possible rise in the price petrochemical producers pay for gas.

In Asian markets, investors refocus on the euro zone debt crisis after European officials failed to reach a deal on a bailout for Greece, while Federal Reserve Chairman Ben Bernanke highlighted the dangers of a U.S. fiscal crisis.

Brent crude futures were up 16 cents at US$109.99 a barrel by 0451 GMT, off an earlier session-high of US$110.55.