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Wed 25 May 2011 11:43 AM

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Saudi shares retrace losses as oil rebounds

Kuwait and UAE bourses fall to multi-week lows, tracking losses in global shares

Saudi shares retrace losses as oil rebounds
(Getty Images)

Saudi shares rose after oil prices rebound, bucking a downbeat regional trend as petrochemical stocks led gains.

Brent crude prices bounced back above $112 a barrel as the euro briefly reversed losses after the Finnish parliament approved the €78bn bailout from the European Union and the IMF, with critics outnumbered by supporters of the deal.

The Saudi petrochemicals index rose 0.4 percent.

Bellwether Saudi Basic Industries Corp climbed 0.2 percent and Saudi Kayan rose 0.8 percent.

Riyadh's benchmark TASI added 0.2 percent to close at 6,724 points. It has been trading within a range of about 300 points since the end of March.

The food and agricultural sector, seen as a safe haven in uncertain economic conditions, climbed 0.1 percent.

Kuwait and UAE bourses fell to multi-week lows, tracking losses in global shares, with few regional catalysts to draw in buyers.

World stocks fell while the euro headed towards a two-month low on Wednesday on concerns about the euro zone's spreading debt crisis and the potential for a further reduction of positions in risky assets.

"International markets are having a dragging affect on our markets, so it's just feeding in," said Shahid Hameed, Global Investment House head of asset management for the Gulf region.

Kuwait's benchmark KWSE slipped 0.6 percent to 6,369 points, its lowest close since April 17 and third straight decline.

Heavyweight Zain fell 1.9 percent, slumping to a 15-month low, while logistics firm Agility dropped 1.3 percent.

Volumes were focused in small-cap stocks, signaling speculative trading.

"We're already starting to see the start of the traditional summer doldrums," said Hameed.

Elsewhere, Dubai's index DFM dropped 1.2 percent to 1,526 points, its lowest close since March 22.

Dubai has run up sharply in the past month or so. It rallied very hard and was due for a correction," added Hameed.

Bellwether Emaar Properties Arabtec each fell 1.6 percent.

Abu Dhabi's measure ADI ended down 0.6 percent at 2,600 points, a seven-week low.

First Gulf Bank fell 2.6 percent, while Abu Dhabi National Energy Co (Taqa) plunged 4.8 percent to near an eight-month low.

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