Background moderately positive for GCC markets

Gulf stock markets may keep a firm tone on Monday after oil prices edged up from recent lows and as Asian equities provide a positive global background.

Saudi Arabia's 2015 budget, which will maintain spending at a high level despite lower oil revenues, has buoyed Gulf bourses in the last two sessions, helping them recover from a panic sell-off that was triggered by oil's plunge in early December.

On Monday, Brent crude edged back up towards $60 per barrel as escalating clashes in Libya hurt supply.

Global equity markets are strong with MSCI's index of Asian stocks excluding Japan up 1.1 percent.

Some Gulf stocks, however, may see profit-taking after key announcements. Saudi Arabia's National Commercial Bank lost 1.2 percent on Sunday after proposing a dividend of 0.65 riyal per share for the second half of 2014, its first since listing last month.

Another Saudi Arabian firm, dairy producer Almarai, said late on Sunday its board recommended a cash dividend of 1 riyal per share for 2014, unchanged from 2013, which was in line with analysts' expectations but may disappoint some investors who had hoped for a higher payout.

At 80.08 riyals, the stock now trades well above the median price target of 71.20 riyals given by 16 analysts polled by Thomson Reuters. Only one of those analysts recommends the stock as a "buy".

Technically, the stock faces major resistance at 83-83.75 riyals, the record highs hit in September and October. 

In the UAE, Dubai's index jumped 2.6 per cent to 3,987 points as most stocks gained. The benchmark rose briefly above the psychologically important 4,000 point mark but then gave up some of its gains.

Abu Dhabi's index rose 1.3 per cent on the back of blue chips such as National Bank of Abu Dhabu and First Gulf Bank, up 1.1 and 2.1 per cent respectively.

Follow Emirates 24|7 on Google News.