Dubai's bourse dropped from a 16-month high on profit-taking on Tuesday after a rally, while Egyptian shares rose to an eight-month high on foreign and local buying, and other Gulf markets were mixed. Dubai's index dropped 3.7 percent, down from Sunday's 16-month closing high. Some analysts had expected a correction after the region's sharpest rally this year.
"Dubai's index formed a doji candle yesterday; observing such a candle after a long rally usually signals that a correction is approaching, and sure enough the index fell today, ahead of resistance at 1,800 points," said Sleiman Aboulhosn, assistant fund manager at Al Masah Capital. A doji candle is where the opening and closing price are identical. Bellwether Emaar Properties dipped 3 percent,
Dubai Financial Market fell 6.5 percent and Deyaar Development slumped 9.2 percent. Contractor Arabtec closed 7.1 percent lower. Abu Dhabi's Aabar Investments has raised its holding in the builder to 5.28 percent, Arabtec said. "Arabtec has weathered the worst of the storm and what would benefit investors at this time is to get more clarity on what the strategy is behind the stake purchase," said Ibrahim Masood, senior investment officer at Mashreq bank. Foreign and institutional buying of blue chip shares pushed Egypt's main index to a new eight-month high, with real estate companies still drawing much of the interest.
Property developer SODIC jumped 10 percent after reporting strong sales of residential units. Real estate was one of the worst-hit sectors after a popular uprising last year, but analysts saw some signs of recovery.
"SODIC has been on the radar for the past two to three weeks, backed by sales from the first phase of the same project and now it's selling further phases," said Mohamed Radwan, head of equities at Pharos. "But the gain is linked to broad interest in real estate because of last year's depressed prices." Rival Talaat Moustafa Group climbed 2.6 percent, and developer Palm Hills added 3.1 percent.
In Saudi Arabia, petrochemicals stocks led the index up 0.6 percent. It rose for a 14th-consecutive session in its longest winning streak in more than five years. Saudi Kayan Petrochemical jumped 5.5 percent, Nama Chemicals rose 3.8 percent and Bellwether Saudi Basic Industries Corp (SABIC) added 0.7 percent.
Telecom stocks lent support as Zain Saudi surged 5.6 percent and Etihad Etisalat climbed 0.8 percent. Abu Dhabi's index fell 0.6 on profit-taking after hitting a seven-month high on Sunday, with First Gulf Bank down 1.2 percent, Sorouh Real Estate slipping 5.5 percent and Aldar Properties shedding 4.7 percent.