MIDEAST STOCKS-Dubai drops to 8-wk low in profit-taking; Egypt recovers

By Nadia Saleem

DUBAI, March 27 (Reuters) - Dubai's bourse dropped to an eight-week low on Wednesday, as investors booked gains from an early-year surge, while bargain hunting helped lift Egypt from a 15-week trough.

Dubai's real estate bellwether Emaar Properties EMAR.DU and telecommunications operator Du DU.DU led declines, slipping 3.6 and 2.9 percent.

The market hit a 39-month high in late February, boosted by a tentative recovery in property prices and a thriving tourism sector, but it has lost steam in the last several weeks, partly because some stocks have gone ex-dividend.

"Technically, stocks are overbought and the market will consolidate around these levels or a bit lower, and that's healthy," said Amer Khan, fund manager, Shuaa Asset Management.

"Medium-term, fundamentals and valuations have room to fill up. The UAE is recovering and the blue chips will reflect that."

The emirate's benchmark .DFMGI fell 1.6 percent to finish at 1,837 points, its lowest close since Jan. 28. The break below chart support at the March low of 1,860 points triggers a double top formed by the February and March peaks; this points down to around 1,770 points in coming days or weeks.

Abu Dhabi's benchmark .ADI declined 0.3 percent, trading in a tight range since climbing to a 40-month high in late February.

In Egypt, the main benchmark .EGX30 edged away from Tuesday's 15-week low, rising 0.7 percent as bargain-hunters returned despite the political instability.

Heavyweight Orascom Telecom ORTE.CA climbed 4.8 percent on renewed hopes of a dispute resolution around its Algerian unit Djezzy. A newspaper reported earlier this week that Russian mobile firm Vimpelcom VIP.N - Orascom's parent company - may soon reach a deal to sell a stake in Djezzy to Algeria's government. ID:nL2N0CH06N

Orascom Construction Industries OCIC.CA gained 3.8 percent. OCI, Egypt's largest listed stock, is battling government charges it evaded 14 billion Egyptian pounds ($2.1 billion) in taxes.

Shares in National Societe Generale Bank NSGB.CA tumbled 10 percent to 33.20 Egyptian pounds, their lowest since August and extending Tuesday's 4.1 percent drop.

The stock has been sliding since the government said it would levy a 10 percent tax on investors who made capital gains from Qatar National Bank's QNBK.QA bid to acquire the Egyptian lender. ID:nL5N0CI14G

The stock exchange said on Wednesday that in response to requests by the public, it would allow investors during the day to "reverse their decision" to sell their NSGB shares to QNB in the Qatari bank's mandatory tender. The tender, at 38.65 pounds, was for the 23 percent of NSGB which QNB had not bought from Societe Generale. ID:nL5N0CI3SC

Elsewhere, Saudi Arabia's market .TASI and Kuwait's bourse

.KWSE ended flat. Qatar .QSI gained 0.4 percent.

In Oman, the index .MSI fell 1.6 percent from Tuesday's 22-month high. Bluechip National Bank of Oman NBO.OM tumbled 6.4 percent after reaching its ex-dividend date.

WEDNESDAY'S HIGHLIGHTS

DUBAI

* The index .DFMGI fell 1.6 percent to 1,837 points.

ABU DHABI

* The index .ADI slipped 0.3 percent to 3,005 points.

EGYPT

* The index .EGX30 gained 0.7 percent to 5,164 points.

KUWAIT

* The index .KWSE eased 0.01 percent to 6,776 points.

SAUDI ARABIA

* The index .TASI ticked up 0.01 percent to 7,178 points.

QATAR