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Tue 28 Oct 2008 10:19 AM

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Global concerns continue to weigh on Gulf markets

UPDATE 5: Most markets extend losses with Dubai, Saudi bucking downtrend.

Gulf markets reversed early gains on Tuesday as concerns over the impact the global economic downturn will have on the region continued to weigh on stocks.

Markets in the UAE closed mixed as Dubai swung between positive and negative territory, eventually edging to a higher close while Abu Dhabi extended losses into a fifth session.

Emaar Properties gained 3.53 percent after it started to buy back shares on Monday, while Air Arabia rose 3.48 percent. The index inched 0.32 percent up to 2,932 points.

In Abu Dhabi, the index closed 1.31 percent lower at 3,278 points, led by First Gulf bank, which slid 6.94 percent and Union National Bank, which ended 6.63 percent lower.

On the Dubai International Financial Exchange, DP World was up 6.06 percent to $0.35, its first gain in seven sessions.

Saudi shares closed more than 5 percent higher, bucking the general downward trend across the Gulf on bank merger speculation.

"There are some rumours two banks will merge and [the market is rising] after the massive declines of the last week," said one Riyadh-based trader, who declined to be identified.

Saudi Basic Industries Corp. (SABIC) surged 7.12 percent, while SABB, Riyad bank and Banque Saudi Fransi all closed more than 8 percent higher.

The index ended 5.31 percent up at 5,621 points, having fallen more than 16 percent in the last four sessions.

In Kuwait, banking stocks led losses after the central bank's move to save Gulf Bank continued to rattle investor sentiment. Burgan Bank dropped 7.25 percent and Kuwait Finance House fell 4.3 percent. The index closed 2.06 percent lower.

Qatar's main benchmark ended down 5.25 percent at 6,435 points, led by Commercial Bank of Qatar and Industries Qatar, which fell 8.65 percent and 5.97 percent respectively.

Oman's main benchmark extended declines into a fifth session as investors continued to be spooked by global markets reversing gains as banks and construction companies fall.

Raysut Cement and Bank Muscat led losses, falling 7.56 percent and 3.26 percent respectively.

In Bahrain, Bahrain Telecommunications Co. (Batelco) ended more than 7 percent lower and Gulf Finance House down almost 10 percent, pulling the index 1.12 percent down to 2,119 points.

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