By Matt Smith
UPDATE 6: Dubai's DFM closes higher for 5th session in six as Emaar extends gains.
Gulf Arab markets extended gains on Thursday, shrugging off overnight declines in U.S. stocks as most regional benchmarks claimed fresh landmark highs.
Emaar Properties led Dubai's index to its fifth rise in six sessions, Kuwait hit a four-week high and Oman's benchmark reached its highest close since early December.
"We will probably see this momentum continue for the next two months," said Robert McKinnon, Al Mal Capital managing director of equity research.
"There's a general acceptance of risk. The pendulum has swung back the other way -- before, people wouldn't take any risk and preferred to sit on cash, but that has changed, with the market rebounding."
Emaar climbed 2.6 percent, taking its gains to 14.6 percent since it reported a $351 million second-quarter loss late last week after writing off a U.S. unit.
"Emaar's revenues weren't that bad and people have absorbed the news about the write-off from John Laing Homes, which has enabled it to wipe the slate clean," said Ayman El Saheb, Darahem Financial Brokerage director of operations.
Air Arabia rose 5 percent to trade last at 1.05 dirhams. Goldman Sachs resumed coverage of the airline with a buy rating and a price target of 1.34 dirhams. Dubai volumes more than doubled from the day before.
"Summer weakness is nearing its end and more people are buying," said Saheb. "The market looks positive as long as it's backed up by strong oil prices and okay international markets. Gulf markets should stabilise and move upwards."
Oil hit a five-week intraday high in early trading, but retreated after Gulf stock exchanges had closed and was down 0.6 percent at $71.55 a barrel at 1131 GMT. Asian stocks recouped initial losses, hitting an 11-month high.
"Globally, some of the economic data has been better than forecast," said Al Mal's McKinnon. "But I think we could see a global and regional sell off in equities if this data doesn't turn from being less bad to actual improvements in economic performance.
"People are expecting this from the fourth quarter and so the market is likely to start getting nervous around then."
Kuwait's Agility fell 1.6 percent despite the logistics giant reporting a rise in quarterly profit as traders booked profit from a four-week, 26 percent rise.
Abu Dhabi's index ADI climbed 0.1 percent, its 15th rise in 17 trading days as volumes hit a seven-week high.
Dana Gas surged 6 percent, extending gains since announcing two gas finds in Egypt on Saturday. This rise is part of a broader uptrend, with the stock climbing 19.6 percent from July 15, when its parent company, Crescent Petroleum, said it was seeking arbitration over the failure of Iran's state oil firm to fulfil a gas export contract.
"Dana Gas was the standout in Abu Dhabi in terms of activity as investors speculate that some progress may be forthcoming on the Iranian Gas pipeline issue," said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.
In Qatar, Barwa Real Estate rose 1.7 percent, taking its gains to 12.5 percent this week.
"Barwa has witnessed a huge turnover this week and I think traders are forecasting the company will announce good quarterly earnings," said Mohamed Abu Ghoush, head of equities brokerage at Ahli Bank.
Barwa's impending merger with Qatar Real Estate Co is boosting demand for both stocks, Abu Ghoush said.
Oman's index MSI advanced for a fifth straight session, reaching a nine-month closing high of 6,117 points.
"The 6,000-mark was seen as a resistance level and so once the index crossed this, more investors bought into the market to build new positions," said Tarik Abdelrazeq, deputy general manager at United Securities in Muscat.
"This is a liquidity-based move. I expect a correction very soon."
The Saudi bourse is closed on Thursdays.