MIDEAST STOCKS-Egypt at 12-wk low on Mubarak trial, Gulf mixed

CAIRO/DUBAI Tue Aug 2, 2011 9:56am EDT

CAIRO/DUBAI Aug 2 (Reuters) - Egypt's bourse fell to a 12-week low on Tuesday as jittery investors sold shares ahead of former Egyptian President Hosni Mubarak's trial, while Gulf markets were mixed in lukewarm sentiment after a U.S debt deal.

Mubarak, the ousted president, is being tried for his role in killing protesters during an uprising earlier this year. Traders said investors are worried that if he doesn't appear in court the country could erupt in a renewed bout of protests.

"There is selling pressure across the board because investors are cautious, eyeing what will happen tomorrow and its outcome," said Chamel Fahmy of Pharos Securities.

The index slumped 2.1 percent, its biggest daily fall since July 12, ending at its lowest close since May 10.

Large-caps Orascom Construction and Orascom Telecom lost 2 and 5.1 percent respectively.

UAE markets extended gains for a second day after sentiment was lifted by a U.S. deal to raise the debt ceiling, signalling a likelihood the country would avoid a default.

Dubai's index climbed 0.7 percent, touching a two-week high.

Bellwether Emaar Properties and Arabtec advanced 1.4 percent each.

"Investors are looking at the global markets before deciding their short-term investments," said Sachin Mohindra, senior vice-president, portfolio manager, Invest AD.

Despite the U.S. debt deal, there are still concerns over a possible downgrade that may weigh on sentiment, he said.

Etisalat helped lift Abu Dhabi's index 0.3 percent.

The telecoms operator gained 0.5 percent after its Indian joint venture partner withdrew a petition filed against the company before India's Company Law Board.

Saudi Arabia's Kingdom Holding jumped 2.5 percent an affiliate signed a $1.2 billion deal to build the world's tallest tower in Jeddah.

Most shares were down on pressure from global markets. The index slipped 0.4 percent, snapping a two-day rally.

World stocks hit a one-month low on Tuesday as investor focus shifted back to weak global growth prospects and the euro zone debt crisis after a U.S. budget deal that will lead to spending cuts of over $2 trillion..

"We believe as the global picture eases, the names which did well in 2Q 11 results will benefit... names in petrochemicals, retail and telecoms," said Farouk Miah, equity research analyst at Jeddah-based NCB Capital.

Saudi Basic Industries Corp (SABIC) dropped 1.2 percent and Yanbu National Petrochemical Co (Yansab) shed 1.5 percent.

In Kuwait, the index gained 0.6 percent but range-bound activity was expected to continue until the market sees a catalyst.

"No one doubts the economic strength of Kuwait but the issue is how and when the government will move ahead on the much anticipated development plan. That would be a major trigger for the market," said AD Invest's Mohindra.

Investors are waiting for the implementation of a $104 billion development plan to reduce oil dependence.

TUESDAY'S HIGHLIGHTS

EGYPT

* The measure dropped 2.1 percent to 4,967 points.

DUBAI

* The index climbed 0.6 percent to 1,536 points.

ABU DHABI

* The index rose 0.3 percent to 2,646 points.

SAUDI ARABIA

* The index declined 0.4 percent to 6,443 points.

KUWAIT

* The measure gained 0.6 percent to 6,075 points.

OMAN

* The index slipped 0.4 percent to 5,812 points.

QATAR

* The benchmark climbed 0.2 percent to 8,429 points.

BAHRAIN

* The measure decreased 0.4 percent to 1,285 points (Editing by Firouz Sedarat)