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Tue 6 Jan 2009 10:11 AM

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Saudi shares gain on back of oil price surge

UPDATE 6: Gaza crisis triggers concern over oil and gas supplies, boosting the Saudi market.

Saudi shares extended gains into an eighth day as investor confidence was boosted by a rally in the oil price.

Oil hit a one-month high of above $50 a barrel as Israel's incursion into Gaza and a dispute between Russia and Ukraine over natural gas heightened concern about supply disruptions.

"It's mainly oil going above $50 that is behind this," a trader said, adding that if the index broke through the 5,300-level, it would trigger a rally up to 5,500 points.

The benchmark closes up 2.11 percent at 5,289 points.

Heavyweight gainers included Al Rajhi Bank and Saudi Basic Industries Corp which added 4.58 percent and 1.72 percent respectively.

Arabtec plummetted 9.65 percent on news Meydan LLC has cancelled a $1.3 billion racecourse construction deal with the firm.

Dubai's Meydan LLC, which in 2007 commissioned a 50-50 joint venture between Malaysian construction firm WCT Bhd and Arabtec to build the racetrack, said on Monday it had cancelled the contract "because of non-adherence to the agreed time schedule for construction".

The index ended 1.09 percent lower at 1,743 points.

In Abu Dhabi, the index rose 1.18 percent to 2,555 points, boosted by a rally in global markets.

First Gulf Bank added the most points to the index, soaring 8.12 percent. 

Qatari shares ended lower after closing higher for six out of the past eight sessions as investors hold back, awaiting fourth quarter results.

Commercial Bank of Qatar plummeted 8.66 percent, while Doha Bank and Qatar Islamic Bank fell 4.87 percent and 2.68 percent respectively.

Industries Qatar declined 4.05 percent.

The benchmark lost 3.39 percent to 6,448 points.

In Kuwait, the index edged 0.3 percent higher to 7,500 points. Mobile Telecommunications Co (ZAIN) added 6.76 percent. Oman's index ended 3.84 percent lower at 5,443 points amid low volumes as investors held off ahead of fourth-quarter results season.

Bank Muscat lost 6.25 percent and National Bank of Oman declined 4.2 percent.

"Volumes are very low. Institutional and pension funds are waiting to see the fourth-quarter results before they decide on their strategy," said Hassan Tawfiq, senior broker at United Securities in Muscat.

"People are still worried about what effects this crisis is going to have on the banking sector," he added.

Bahrain's stock exchange will be closed on Tuesday and Wednesday to mark the Muslim holy days of Ashura. (Reuters)

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Swamy Reddy 11 years ago

No news is good news for Construction is this the begining or ending what further damage that can happen.