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Sun 2 Aug 2009 10:17 AM

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Construction stocks boost Dubai index

UPDATE 9: Drake & Scull most active stock, Abu Dhabi hits six-week closing high.

Construction stocks boost Dubai index
STOCKS NEWS: Emaar stocks fell after second quarter results. (Getty Images)

Dubai's index ended higher for a second session, boosted by gains in banking and construction stocks.

Drake & Scull was the most active stock, accounting for about a quarter of all shares changing hands, and it climbed 2.3 percent after it reported a second-quarter profit of AED90.1m ($24.53m).

Emaar Properties fell 1.1 percent after reporting a quarterly loss of $351.2m.

The index edged 0.1 percent higher to 1,820 points. Dubai Islamic Bank rose 0.8 percent.

Abu Dhabi's index reached a six-week closing high, boosted by energy stocks.

Dana Gas surged 4.4 percent to a seven-week high after it said it had made two gas finds in Egypt with reserves totalling an estimated 76 billion cubic feet.

Abu Dhabi National Energy Co (Taqa) climbed 4.5 percent, taking its gains to 7.2 percent since July 29, when it said it was buying the energy unit of Dutch chemicals group DSM NV for $407m.

Volumes more than doubled from the previous session, with 193 million shares changing hands. The index climbed 0.6 percent to 2,819 points, its highest finish since July 17 and 12th rise in 13 sessions.

National Bank of Abu Dhabi fell 2.5 percent, its first reverse for five sessions. The stock surged 42 percent between July 13 and July 30.

On July 28, NBAD reported a 9.3 percent drop in quarterly profit, which was a smaller decline than analysts had forecast. The lender also announced plans for a share buy back.

Qatar's index hit a seven-week closing high despite slumping volumes.

The benchmark rose 0.8 percent to 6,764 points, its highest close since June 16 as 7.1 million shares changed hands. The daily average for the three months to July 23 was 17.4 million shares.

Industries Qatar gave up most of its early gains to edge 0.7 percent higher. Qatar Islamic Bank surged 4.3 percent.

The stock has climbed 11.6 percent since the lender reported a 3.6 percent rise in quarterly profit on July 21, although analysts say government support has insulated Qatari banks from much of a regional and global economic downturn.

Many analysts forecast Gulf markets to move sideways until after Ramadan, with most quarterly earnings now released and trading subsiding on international and regional bourses as investors take their summer holidays.

A late rally enabled Kuwait's measure to end higher for a second successive session, edging up 0.03 percent to 7,682 points.

Zain was the most active stock and it rose 1.6 percent. National Industries Group added 2.2 percent. Volumes slipped to a 21-week low of 173.4 million shares.

Bahrain's index fell 1 percent to 1,487 points, its biggest one-day loss for three weeks.

Oman's index ended higher for the first session in four as rising oil prices spurred local investors to buy.

Al Jazeera Steel Product Co was the most active stock surging 4.3 percent after earnings beat expectations.

Activity was concentrated in the small-cap stocks, suggesting retail investors are the dominant traders because institutions rarely target these shares.

The combined market cap of the seven most traded stocks was $1 billion, less than half that of market leader Oman Telecommunications Co (Omantel). Omantel climbed 2.3 percent and Bank Muscat rose 2.9 percent.

The index climbed 1.9 percent to 5,958 points. Of the 30 stocks on the index, 28 advance and two were unchanged.

Saudi Arabia's index ended lower as concerns over the US economy and an ongoing dispute with China over petrochemical product pricing weighed on sentiment.

On Saturday, US President Barack Obama warned it would take "many more months" for the United States to get out of recession even after GDP figures showed the US economy shrank only modestly in the second quarter.

"President Obama was cautious about the US economy, which I think was to reduce people's expectations after a very strong performance by US stocks recently," said Sohail Hayyan, SAIB BNP Paribas Asset Management Co senior fund manager.

This weighed on Saudi stocks on Sunday, Hayyan said, with the Tadawul closely correlated to global equities and US markets in particular.

Investors are also concerned about an ongoing row between Saudi Arabia and China, with the latter accusing the former of dumping petrochemicals products at below cost price into its domestic market.

"Uncertainty regarding the problems with China and India weighed on petrochemical stocks," added Hayyan.

Saudi Basic Industries Corp (SABIC) fell 0.7 percent and Rabigh Refining and Petrochemical Co slid 1.8 percent.

The index dropped 0.3 percent to 5,768 points, its third decline in four sessions as volumes fell to a three-week low.