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Wed 7 May 2008 05:20 PM

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Saudi bourse sees sixth straight day of losses

Banking stocks lead declines as investors book profits in stocks that rallied last month.

Banking stocks led declines on Saudi Arabia's index for a sixth session on Wednesday as investors booked profits in stocks that had rallied last month.

Elsewhere in the Gulf, Kuwait and Qatar extended their impressive run of gains, while Abu Dhabi closed lower for a second trading day.

Losses on the Saudi bourse were paced by Al-Rajhi Bank, Banque Saudi Fransi and Arab National Bank, which fell 2.41%, 5.29% and 5% respectively.

Al-Rajhi jumped almost 15.3% in April, while Banque Saudi Fransi added 11.8% and Arab National Bank gained 24.9%.

The benchmark fell 1.56% to 9,771.85 points. It was down about 10% this year to Tuesday's close, but had jumped 11.9% in April to hit a two-month high of 10,099.21 points on April 29.

"The market faced a resistance at 10,200 points and it could not cross it," Marwan Shurrab, a senior trader at Shuaa Capital, told newswire Reuters.

"Logically, we should see a correction and the best point to have it is at that resistance level. It was a good point for people to take profits from the rally we saw."

In Qatar Doha Bank led the gains, with the stock jumping after ING raised its price target to 122.1 riyals.

The stock shot up 6.8% to 82.50 riyals, lifting the benchmark for a fifth trading day. Qatar's measure added 0.68% to 11,732.72 points.

The Doha index is the Gulf region's second-biggest gainer this year after Oman, up more than 21% to Tuesday's close.

Kuwait continued to record setting pace, helped out by Global Investment House and Kuwait Projects Company (Kipco), which added 3.77% and 3.57% respectively.

The measure made it eight consecutive days of gains, finishing up 0.08% on 15,053 points - a new lifetime high.

Telecom Omantel lifted the Muscat index for a second trading day on an HSBC price target revision, which boosted regional buying in the telecomfirm.

The Muscat index, up more than 25% this year to Tuesday's close, rose 0.83% to 11,399.34 points.

Omantel climbed 3.02% to 2.120 rials ($5.51), having surged more than 8% on Tuesday, when HSBC raised its fair value target on the stock to 2.570 rials.

"I am seeing a lot of regional buying," said Sankar Kailasam, head of research at Muscat-based Gulf Investment Services. "HSBC has given an upgrade on the stock and that is the trigger," he said.

The Omani government's plan to sell up to a 35% stake in Omantel to a global investor is also boosting interest in the stock, he added.

In Abu Dhabi declines among nine of the 10 largest stocks were paced by Dana Gas and Aldar Properties, falling 1.9% and 1.68% respectively. The measure shed 0.74% to 5,002.64 points.

"There are low volumes and most of the trades are by local speculators. Foreign investors are not in the market now," said Alaa El Din Moustafa, chief dealer in Dubai at EFG-Hermes.

"We are heading towards the summer so the markets should be stable," he said.

Dubai's measure closed higher for the fourth time in five trading days, gaining 0.6% to 5,859.57 points. Emaar Properties rose 1.28%.

In Bahrain, United Gulf Bank plunged 6.82%, pushing the index down 0.73% to 2,807.30 points.