JEDDAH – Gulf stock markets stabilized by the close on Wednesday after plunging in early trade on the prospect of an escalation of Syria's civil war, as the United States threatened a military strike on Damascus over the use of chemical weapons. The Saudi as well as Bahrain bourses closed in positive territory, while the rest of the Gulf markets recorded narrow losses. Saudi Arabia, which lost 2.1 percent in early trade, ended 0.4 percent higher to 7,751 points. As global oil prices climbed in response to the Syrian tensions, some Saudi petrochemical stocks rose in sympathy. Saudi Kayan jumped 2.6 percent and Saudi Basic Industries (SABIC) gained 1.3 percent. Many analysts and fund managers said the Syrian conflict had merely served as a trigger for a wave of profit-taking that would have happened anyway, given the size of Gulf markets' gains this year. Dubai is still up 55 percent year-to-date. Bahrain index rose 0.3 percent to 1,190 points. Dubai's index, which tumbled 7.0 percent on Tuesday and as much as 7.5 percent on Wednesday morning, ended the day down just 1.3 percent at 2,516 points, after rebounding sharply from near technical support on its 100-day average at 2,342 points. The fundamental economic picture in the United Arab Emirates and the Gulf Cooperation Council countries in general is “still very attractive”, said Amer Khan, fund manager at Shuaa Asset Management in Dubai. “A lot of things look pretty attractive where they sit right now, such as Abu Dhabi banks that hiked dividends and are looking at growth next year,” he said. Khan added institutional investors had largely stayed out of the recent wave of selling in the region and might now start buying blue chips if they had missed part of this year's uptrend or wanted to rotate between sectors. Dubai's trading turnover fell during periods when the market was weak on Wednesday and increased when it was rebounding - a positive technical sign which suggested substantial buying interest remained at the lows. The market now faces technical resistance around 2,600 points, which served as support earlier this month. Abu Dhabi index dropped 2.2 percent to 3,737 points. Kuwait index fell 0.8 percent to 7,708 points. Qatar index fell 2.3 percent to 9,548 points as Oman index lost 3.0 percent to 6,641 points. Egypt index sank 2.1 percent to 5,226 points, its lowest close since July 9. Egypt's market fell sharply on Wednesday, a sign that investor optimism after last month's ouster of The fall, which started with a gap down at the opening, was technically bearish as it triggered a head and shoulders pattern formed by the peaks since July. The height of the pattern points down to the 5,000-point area. — SG/Agencies
