Middle East stocks: Egypt snaps four-day rally

Most Gulf markets gained on Tuesday, buoyed by rising oil prices, while Egypt's main index halted a four-session rally, dragged by stocks to be dropped from the MSCI index. Rising oil prices helped UAE stocks advance, with Dubai's index making its largest gain in a month. Bellwether Emaar Properties rose 2.6 percent, Dubai Islamic Bank climbed 1 percent and Emirates NBD added 0.3 percent.
Dubai's benchmark climbed 1.6 percent to an eight-day high. Oil jumped by more than $2 on Tuesday then pared gains with Brent crude above $116 a barrel, as the dollar weakened on improved prospects for a bailout for heavily indebted Greece and US confidence data disappointed. "I think regional markets, specifically Dubai and Abu Dhabi, are experiencing a reflex move on the back of a rise in oil prices over the past couple of days," said Sleiman Aboulhosn, assistant fund manager at Al Masah Capital.
Abu Dhabi's index gained 0.7 percent. Aldar Properties rose 0.7 percent and Dana Gas climbed 1.6 percent. These two stocks accounted for more than a third of total index volumes. Egypt's benchmark index fell 1.2 percent, breaking a four-session rally spurred by foreign offers of financial aid to help the country weather its economic crisis.
Ezz Steel, the third most traded stock on the index, shed 5.8 percent and El Sewedy Electric dropped 1.2 percent before both stocks are dropped from MSCI's Egypt index. "It's a system removal but funds were selling their exposure," said Mohamed Seddiek of Prime Securities. Sewedy, the Arab world's biggest listed cable maker, marked its biggest one-day loss since May 18.
Oman's index rose for a second day since Sunday's 22-month low as valuations drew in institutional buyers. The benchmark ended 0.8 percent higher, while volumes hit a six-week high. "The market has over-reacted to the negativism, so a bounce-back is on cards, mainly driven by the blue chip counters," said Kanaga Sundar, Gulf Baader Capital Markets head of research. "Fundamentals remain intact and prices look attractive for those investing on a medium-term horizon. Institutionals (will) remain as net buyers on Oman's bourse," Sundar added.
Blue chips Renaissance Services and Bank Muscat rose 1.6 and 1.8 percent respectively. Bank of America Merrill Lynch upgraded Bank Muscat to "buy" from "neutral", citing excessive discounting for political risk and the negative impact from associate Bank Muscat International, the US bank said in a note.
"Valuation is compelling," the note said. Loan growth at Bank Muscat, Oman's largest lender by market value, will likely gain momentum this year and reach a sustainable 13 percent from 2012 onwards, driven by a pick-up in corporate credit activity, the note added. Qatar's index recovered early-session losses to end 0.3 percent higher, only its second gain in eight sessions.