* Abu Dhabi cement makers rally on prospects of stronger demand
* Dana Gas, Union National Bank fall after earnings
* Arabtec surges but Emaar sell-off drags down Dubai
* Saudi banks continue to gain after Riyad's capital boost
* Egypt rises as govt says $4 bln stimulus package imminent
By Olzhas Auyezov
DUBAI, Feb 2 (Reuters) - A $6.1 billion contract awarded by Abu Dhabi state fund Aabar to Dubai's Arabtec helped fuel a cement sector rally in Abu Dhabi but failed to offset profit-taking on Dubai's bourse on Sunday, while banks lifted Saudi Arabia's market.
Confirming a Reuters report on Saturday, Arabtec said on Sunday that it would build 37 towers for Aabar, which is its biggest shareholder, and become Aabar's contractor of choice for projects around the world worth $20 billion.
Arabtec's stock rose 2.8 percent and another Dubai-based builder, Drake and Scull, gained 2.0 percent. But a 1.4 percent drop by heavyweight property developer Emaar dragged Dubai's main market index down 0.4 percent.
Emaar might have been affected by news of the full conversion of its $500 million bond into shares last week, said Ali Adou, portfolio manager at The National Investor.
"Overall, the market has to cool down, especially after the rally that we saw since the beginning of this year," he said. Dubai's index gained 12 percent in January.
Dubai's main index closed at 3,754 points; since Jan. 23 it has been unsuccessfully testing resistance around 3,807 points, the 50 percent retracement of the drop from its 2008 peak.
Abu Dhabi's main index rose 0.4 percent, led by Ras Al Khaima Cement Co which on Sunday reported a 7.9 million dirham ($2.2 million) profit for 2013, recovering from a 7.3 million dirham loss in 2012.
That, along with news of the Aabar-Arabtec deal, sparked a rally in the cement sector. Shares in Ras Al Khaima Cement surged 14.6 percent; Ras Al Khaima White Cement and Construction Materials, Gulf Cement, Union Cement and Sharjah Cement also rose.
Large property projects, along with construction related to the Expo 2020 world's fair in Dubai, will "obviously impact cement prices and benefit local cement producers", said Marwan Shurrab, fund manager and head of trading at Vision Investments.
The cement rally offset losses by Dana Gas, which on Sunday posted a 6 percent fall in 2013 net profit, and Union National Bank, whose fourth-quarter profit fell short of analysts' estimates.
In Saudi Arabia, the main index rose 0.9 percent, led by the banking sector which continued a rally ignited last week by Riyad Bank's proposal to double its capital by issuing bonus shares. Riyad Bank rose 2.7 percent to a fresh five-year high on Sunday.
Egypt's bourse rose 0.4 percent after Finance Minister Ahmed Galal said the government would announce details of a fresh $4 billion stimulus package within days.
* The index fell 0.4 percent to 3,754 points.
* The index climbed 0.4 percent to 4,693 points.
* The index gained 0.9 percent to 8,835 points.
* The index climbed 0.4 percent to 7,436 points.
* The index gained 0.2 percent to 11,174 points.
* The index edged up 0.07 percent to 7,093 points.
* The index rose 0.7 percent to 7,810 points.
* The index slipped 0.2 percent to 1,291 points.