MIDEAST STOCKS-Regional mkts rally as global gains trigger renewed buying
DUBAI May 19 (Reuters) - Regional shares rallied on Sunday with markets in Kuwait and Doha breaking key psychological levels as gains in U.S. equities and oil prices spurred renewed buying to top off an underlying bullish sentiment.
In Saudi Arabia, the index climbed 1 percent, extending gains to hit a one-year high.
Bluechips led the rally with eight of the 10 largest firms rising. Sentiment turned around from last week's selling, as upbeat global markets buoyed hopes world demand will pick up.
Saudi petrochemicals index climbed 0.9 percent, helped by gains in oil price - a proxy for global economic activity and also demand for petrochemical products.
U.S. equities surged after consumer sentiment in the world's largest economy hit an almost six-year high in early May.
In Qatar, the main benchmark climbed 1 percent to make it the largest one-day gain in three weeks and finished just above the psychologically important 9,000 level. The market, up 7.8 percent year-to-date, is beginning to catch up with regional peers as attractive valuations draw in investors.
Doha's market tumbled to a 2013 low in mid-April ahead of a planned listing of sovereign assets under a new firm called Doha Global Investment Co. Investors looking to subscribe in the initial public offering cashed out of existing positions, but delays on a May listing for the firm brought back buying interest.
"It's a corrective move - there are some stocks undervalued after the strong selling pressure due to the IPO news and people are coming back to buy," said Yassir Mckee, wealth manager at Al Rayan Financial Brokerage.
"The market momentum is picking up and we might stay over the 9,000 mark this year but we will have to see corporate earnings and performance of IPOs in coming months for further direction."
In the UAE, Abu Dhabi developers Aldar Properties and Sorouh Real Estate rallied 14.7 and 15 percent respectively in heavy trading - hitting the maximum limit for daily gains of 15 percent. Analysts said market talk the firms may be awarded a mega government housing project ahead of their planned merger in June triggered the buying.
Aldar and Sorouh declined to comment on the price movement.
Abu Dhabi's benchmark climbed 1.4 percent, while Dubai's index advanced 2.5 percent - hitting fresh multi-year highs.
"(There's) no looking back as regional markets, especially the UAE and Kuwaiti markets, seem to be catching a second wind in their momentum buying," investment firm Al Masah Capital said in a note.
Investors tend to sell in May ahead of a slow summer and travel abroad to escape the searing desert heat but, this year, the trend seems to have broken as chasing gains takes the lead.
"Bears and short-sellers have no choice but to stay on the sidelines for the time being although once the momentum slows, there may be some interesting entry points," Al Masah Capital's note added.
Kuwait's measure rose 1.5 percent to finish at 8,021 points - closing above the psychologically-important 8,000 level for the first time since July 2009.
The next target is 8,438 points, the previous peak.
Companies have posted improved earnings in the last two quarters with banks - which hold shares as collateral for loans - profiting from the equities rally and improved economic outlook as political unrest steadied.
"The overwhelming positive sentiment only seems to grow with each trading session... we expect the market rally to sustain," said Fouad Darwish, head of brokerage at Global Investment House.
* The index rose 1 percent to 7,300 points.
* The index rose 1.5 percent to 8,021 points.
* The index climbed 2.5 percent to 2,352 points.
* The index gained 1.4 percent to 3,564 points.
* The index climbed 0.3 percent to 6,393 points.
* The benchmark advanced 1 percent to 9,009 points.
* The index gained 0.4 percent to 5,451 points.
* The measure climbed 0.9 percent to 1,158 points.
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