Gulf up as eurozone hopes lift global stocks

Indexes rise as hopes grow European leaders will take bold action to resolve continent's two-year debt crisis

Gulf Arab markets rallied on Monday, some from multi-year lows, as growing hopes eurozone leaders would unveil fresh measures to resolve a two-year-old debt crisis lifted stocks worldwide.
"There's a lot of volatility given what's going on in Europe and the news flow tends to drive sentiment on a day to day basis," said Tarik Lotfy, head of MENA equities at Arqaam Capital in Dubai.
Saudi Arabia's index gained 1.2 per cent, rising for a first session in six, easing away from Sunday's seven-week low.
Real estate accounted for more than a quarter of all shares traded, lifting the sector's index to a 17-week high.
Some investors were betting on gains by property stocks ahead of December's Cityscape Riyadh exhibition, said a Riyadh-based trader who asked not to be identified.
"Saudi's real estate market is healthy and for the past few sessions the sector's stocks have been going up while the wider market fell," said the trader, adding that some investors are betting on companies announcing new projects at the exhibition.
Kuwait's index was near-flat. The country's government has quit, parliamentary sources said, to resolve demands from protesters and opposition deputies that the prime minister step down over corruption allegations.
"The political turmoil is what has been driving the market lower day after day, but the market would take the resignation of the government positively - the opposition is coming from the people and it is they who trade the market," said a Kuwait-based trader who asked not to be identified.
"They elect the parliament and the emir chooses the government, so the government's resignation would be seen as a victory for the people as one would expect the new government to be more amenable to the people's wishes."
Dubai's index made its largest gain in four weeks to rebound from Sunday's seven-year low. Volumes hit a four-week high.
"The market initially found support from Asia and U.S. futures, but the momentum didn't really start to build until midday when a rumour started circulating that the UAE would be upgraded by MSCI," said Julian Bruce, EFG-Hermes director of institutional equity sales.
"That drew speculative buyers in, but whether this is sustainable remains to be seen."
The UAE, along with Qatar, will find out in December if influential index compiler MSCI has upgraded them to emerging market status from frontier market, having delayed its decision from June.
"Last week, it seemed everyone had written off the UAE's chances of being upgraded, citing liquidity constraints as an additional hurdle, but the DVP (delivery-versus-payment settlement) system seems to be functioning at the front end, which ticks one of MSCI's boxes," said Bruce.
Emaar Properties climbed 4.4 per cent and Union Properties added 3.4 per cent. Property stocks, which tend to lead index moves, were the most active.
"UAE markets may be cheap, but they are cheap for a reason. The property sector directly and indirectly dominates UAE equity markets and most will agree we have some way to go before the inherent travails are overcome," adds Bruce.
Dubai's housing market will lose another 10 per cent of its value before its fortunes start to improve, possibly not until 2013, a Reuters poll showed in October.