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Tue 2 Apr 2013 03:36 PM

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Bluechips help Dubai bourse halt slump; Qatar up

Dubai climbs 1 percent to 1,843 points, easing away from Monday's two-month low

Bluechips help Dubai bourse halt slump; Qatar up

Dubai's index makes its largest gain in two weeks to rebound from the previous day's two-month low, but thin trading means investors are unsure whether Tuesday's gains indicate an end to the recent downward trend.

The index climbs 1 percent to 1,843 points, easing away from Monday's two-month low.

About 79 million shares trade, which is 58 percent higher than a day earlier, but still less than half the 2013 average of 177 million shares.

"The market was very quiet so it's very difficult to say this marks a change in trend," says Sebastien Henin, portfolio manager at The National Investor.

"Maybe after the correction of the past few weeks, some investors think the market has fallen enough."

The index has fallen in four out of six sessions, reducing year-to-date gains to 13.6 percent. It is down 5.3 percent since Feb. 24's 39-month peak and has broadly followed a similar pattern to 2012 when an early-year surge gave way to a sustained slump from early March.

But those bald numbers fail to show a crucial difference this year compared to last, says Henin.

"Last year, it was speculative money coming into small- and mid-cap stocks that pushed the market higher but this time it's only about three or four large stocks - the quality names - that are responsible for most of the rally," says Henin.

This means the market can better hold onto its early-year gains as the increase in prices is backed up by company fundamentals, with Emaar Properties, Emirates NBD and telecom operator du the main drivers of the rally.

Emaar rises 3 percent and top bank Emirates NBD adds 1 percent, but du slips 0.4 percent. All three are up more than 30 percent this year.

NASDAQ Dubai-listed DP World rises 4.4 percent to be up 21.9 percent in 2013 and is another bluechip to outperform.

Abu Dhabi's measure slips 0.04 percent to 3,007 points. A break below 2,930 points would be a bearish signal, while the benchmark needs to break above 3,070 to be bullish, according to technical analysis.

Qatar's measure ends 0.6 percent higher at 8,549 points, ending a three-session losing streak to ease away from Monday's three-week low.

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