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Tue 7 Aug 2012 10:33 AM

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Gulf markets seen steady; Air Arabia in focus

Dubai's benchmark slipped 1 percent, easing away from a 13-week peak, and Saudi Arabia's measure eased for a second session

Gulf markets seen steady; Air Arabia in focus
Dubais benchmark slipped 1 percent, easing away from a 13-week peak, and Saudi Arabias measure eased for a second session.

Global shares are higher on hopes that Europe will take further action to tackle its debt crisis on increasing pressure from bond markets but Gulf investor confidence is tepid as uncertainties persist.

Dubai's benchmark slipped 1 percent on Monday, easing away from a 13-week peak, and Saudi Arabia's measure eased for a second session from Saturday's two-month high.

UAE budget carrier Air Arabia may see some gains after it said quarterly net profit rose 30.7 percent to AED66.2m (US$18m), beating analysts' forecasts.

"Some good earnings may lift the market but the trend I see is one of flat to slightly lower," says a Dubai-based trader who asked not to be identified. "The only thing investors around the world are looking for is stability in Europe. I'm not saying sentiment is negative but the holiday season and expectations for more [US] Fed action is keeping stocks from sliding."

Global sentiment improved as yields in Spain and Italy inched lower on Monday on expectations the European Central Bank will follow through with last week's statement which hinted at upcoming policy steps to contain Madrid's borrowing costs.

An increase last week in the US jobless rate to 8.3 percent kept prospects of further monetary stimulus from the Federal Reserve on the table.

In Oman, Bank Muscat, Oman's largest lender by market value, saw its OMR96.7m(US$251.2m) rights issue 127.5 percent covered by investors, the lender said.