Reuters/Dubai

A real estate stock rally extended in Saudi Arabia yesterday, helping lift the bourse for a third consecutive session, while foreign investors bought Egyptian bluechips battered by recent political turbulence.

Qatar’s benchmark index declined 0.7% to 9,361 points.

The Saudi index rose 0.8%. Saturday’s sharp drop, that wiped out nearly all the gains of the past four weeks on regional political tension, has brought back fresh buyers.

Real estate stocks outperformed the market, extending a rally driven by upbeat sentiment towards the sector; Makkah Construction and Taiba Holding jump 7.1 and 2.9% respectively.

The sector’s index climbed 2.4%, up 38.4% year-to-date and outperforming the main index’s 10.7% gain in 2013.

Current gains in real estate stocks reflect a pricing in of the positive sentiment towards the sector, said Faysal Badran, chief investment officer at NCB Capital. “The dynamics for residential real estate are quite positive given low home ownership and improving disposable incomes.”

A strong macro story for the kingdom boosts a bullish overall view for the market, he added.

In the UAE, markets were mixed with Dubai’s index easing 0.1% to cut 2013 gains to 46.7%. The market has traded within a range of 135 points for the last two weeks as investors await fresh catalysts - which may come in the form of second-quarter earnings.

Shares in Dubai Financial Market, the Gulf’s only listed bourse, rose initially after sources told Reuters that a long-standing proposal for a merger with the Abu Dhabi exchange has been revived. The stock closed flat as investors booked profits to keep 2013 gains to 92.2%.

Contractor Arabtec rose 2.4%, the most actively traded stock. It gained for a second session since Abu Dhabi’s Aldar Properties awarded a 4bn dirhams ($1.1bn) contract to a joint venture led by the Dubai builder for a mixed-use development project in Kazakhstan.

Abu Dhabi’s index climbed 0.5%, taking gains to 39.1% in 2013.

In Egypt, the main benchmark climbed 1.1%, its third gain in the last four sessions since it plunged to a near one-year low.

Foreign investors bought battered bluechips, while Egyptians extended their selling spree in worries over the country’s poor economic outlook worsened by political tension.

Trading volumes were thin as most investors stay out of the market as Egypt heads towards June 30, the one-year anniversary in office on President Mohamed Mursi.

Opposition calls for massive protests on the anniversary triggered a sell-off this month. The market has lost 13.8% this year, underperforming its Gulf peers.

Elsewhere, Kuwait’s index eased 0.06% to 8,076 points; Oman’s measure declined 0.3% to 6,493 points, while Bahrain gauge retreated 0.1% to 1,204 points.