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Mon 14 Jun 2010 11:16 AM

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Oil price leads Saudi stocks to 3-week high

UPDATE 3: Saudi index up 1.2%; Dubai index falls 0.4% while Abu Dhabi dips 0.3%.

Oil price leads Saudi stocks to 3-week high
MARKET FORCES: Kuwaits benchmark fell 0.5 percent in early trade. (Getty Images)

Saudi stocks ended higher, hitting a three-week high, on the back of higher oil prices and as local investors take advantage of low valuations, boosting several bluechips.

The index gained 1.2 percent to 6,340 points.

Oil prices on Monday rallied by 2 percent to above $75 a barrel, while European and Asian markets rose to their highest level in four weeks.

Bluechips Sabic and Riyad Bank each advanced 2.5 percent.

Property stocks dominated volumes and led Dubai's index lower, while Abu Dhabi traded slightly higher due to gains in Etisalat.

Dubai's Deyaar, Emaar Properties and Union Properties were the most active stocks, shedding 3.4 percent, 0.3 percent and 0.8 percent respectively.

The main index fell 0.4 percent.

"I believe we're going to see a week with very little changes, some sideways movements," said Samer al-Jaouni, General Manager of Middle East Financial Brokerage Co.

"Next week we'll see some more movements as we're nearing the end of the second quarter and some may change or liquidate positions," he said.

Abu Dhabi's index fell 0.3 percent.

Qatar stocks ended higher, led by banks, as investors took advantage of low valuations and built positions ahead of second-quarter earnings.

The Doha index climbed 1.5 percent to 7,025 points, outperforming other markets in the Gulf.

"Most investors expect good results in the second quarter," said Hani Girgis, assistant chief dealer at Dlala brokerage.

Masraf Al Rayan gained 5.1 percent and was the most active stock.

Moody's in a report on Monday said the outlook for Qatari banks is stable.

"This reflects the Qatari banks' solid franchise development in a strong macroeconomic environment and a highly supportive banking system, but also captures the challenges faced by the banks in maintaining good credit quality fundamentals and earnings in this small concentrated market," the report said.

Kuwait's index edged 1.3 percent lower to 6,554 points, on profit taking, hitting its lowest level since December last year.

Bank Muscat was most active in Oman, falling 1.4 percent and weighing on the index, which closed 0.7 percent lower. (Reuters)

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