JEDDAH/DUBAI: Emaar Properties lifted the Dubai index to a 20-week closing high yesterday as most Gulf markets advanced on surging global sentiment and oil’s climb to a new six-month peak.

Further gains are expected today, providing US stocks hold firm overnight, traders said.

Emaar rose 5.5 percent, putting it up by almost a fifth this week as retail traders bet on a faster economic recovery.

“As a market proxy, if the region performs well then Emaar is expected to follow suit,” said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading.

“It’s very speculative, but Emaar is a stock that has underperformed over the past year and so investors believe its downside is slight, while there has been a lot of news flow that Dubai is over the worst and so if there’s an economic recovery, Emaar should outperform other sectors.”

The Abu Dhabi and Qatar benchmarks added 1.3 and 1.8 percent respectively, but investors on other exchanges were more cautious, with a strong performance in the market leaders of Oman and Saudi Arabia masking broad losses in other blue chips.

Saudi Basic Industries Corp. (SABIC) rose 1.6 percent after Morgan Stanley started coverage on the stock with an “overweight” rating. The US bank also set a price target of SR88 for the share, which ended at SR64.75.

Four of the 10 largest Saudi stocks declined with two rising and four unchanged. The Tadawul All-Share Index (TASI) rose 0.32 percent to 5,789.43 points. The Saudi index has fallen 5.1 percent since closing at a six-month high on Saturday.

Only five sectors closed negative, with losses ranging from 0.04 percent in Hotels to 0.42 percent in Banking. Gains were not substantial, with the range being from 0.09 percent in Building to 1.54 percent in Petrochemical. In addition, although overall market breadth appears positive, with 80 advancers and 38 decliners, giving an AD ratio of 2.10, liquidity was very low, coming in at only SR6.6 billion for the day, the Jeddah-based Financial Transaction House (FTH) said in its market commentary.

Although the market started the day strongly, reaching a high of 5,899.98 points, the index was unable to maintain this positive momentum, partially due to yesterday being the end of the trading week, and despite closing slightly positive for the day, we are still below both the 5 and 20 days moving average. The next support level is the 200 days moving average which is currently holding at 5,697, the FTH said.

“In a normal situation when an economy is good, one would expect some profit-taking and consolidation after such a big move,” said Azam Braikan, Saudi-Swiss Securities head of brokerage in Riyadh.

“So with the credit crunch and the global economic crisis, it’s fair to say Saudi stocks are overbought and that prices don’t reflect earnings.”

In Kuwait, Mobile Telecommunications Co. (ZAIN) climbed 5.6 percent to lift the Kuwait index to its highest finish of 2009.

“For the past couple of weeks, telecoms have been stable and so are now playing catch-up with the rest of the market,” said Abdul-Muhsen Al-Bahar, head of local and Gulf investments at Noor Financial Investment Co. “Buying is increasing and it’s down to stability in parliament and stronger oil prices.”

The Dubai index rose 1.9 percent to 1,763 points, its highest close since Jan. 7 and the Abu Dhabi index increased 1.3 percent to 2,644 points, its first advance in three sessions.

The Kuwaiti index climbed 1 percent to 8,002 points.

The Oman index increased 0.2 percent to 5,511 points as volumes slumped to a three-week low.

Qatar’s index ended higher for the first session in four, rising 1.8 percent to 6,662 points.

The Bahraini index slipped to a lower close, falling 1.2 percent to 1,614 points, its second reverse in three sessions.

— With input from agencies