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Sun 8 May 2011 10:31 AM

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Bargain hunters lift Saudi index

UAE markets end lower, tracking drops on other Gulf Arab bourses as oil price declines weigh

Bargain hunters lift Saudi index
(Getty Images)

Bargain hunters lifted the Saudi index to a higher close, helping recoup about half of Saturday's losses which were inspired by a sharp drop in oil prices.

Crude dropped $16 last week, the biggest ever drop for a week in dollar terms.

Seven of the 10 largest stocks ended higher, with Saudi Basic Industries Corp the most heavily traded. It rose 0.2 percent.

Analysts forecast continued volatility in coming sessions.

"Some investors are picking up stocks on valuation," said a Riyadh-based trader speaking on condition of anonymity. "Until crude settles, you will see volatility. Whenever there is uncertainty, you have volatility," he said.

The benchmark added 0.7 percent to close at 6,624 points, easing up from Saturday's two-week low.

Al Rajhi Bank, the largest Saudi bank by market value, rose 0.7 percent and Saudi Arabian Fertilizers Co gained 1.3 percent.

UAE markets ended lower, tracking drops on other Gulf Arab bourses as oil price declines weighed, with Dubai's index DFM slumping to a four-week low.

Dubai's benchmark fell 1 percent to 1,592 points, its lowest finish since April 12 as all sectors retreated.

Arabtec and Emaar Properties fell 1.4 and 1.6 percent respectively, between them accounting for a third of all shares traded.

Abu Dhabi ADI dropped 0.4 percent to 2,686 points.

Oil fell on Friday to cap a frenzied trading week that sliced prices by more than $16 on demand worries and a move by investors to slash commodities exposures.

Saudi Arabia's index TASI made its largest drop in eight weeks on Saturday, dampening sentiment on most other Gulf markets a day later.

Most UAE bank stocks slid, despite an upbeat outlook.

"There is a good momentum [in the banking sector] because of first-quarter results and we expect it to continue," said Sebastien Henin, portfolio manager at TNI National Investment.

Shares in First Gulf Bank , Abu Dhabi's second largest bank by market value, have lagged and offer potential upside, he added. FGB shares dropped 1.4 percent.

Elsewhere, Qatar's index QSI edged up 0.07 percent to 8,458 points, ending a five-session losing streak. Qatar Telecom (Qtel) gained 2.4 percent.



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