MIDEAST STOCKS-Gulf mkts fall as global sell-off spooks investors

By Nadia Saleem

DUBAI, May 23 (Reuters) - Most Gulf markets fell on Thursday as a sell-off on international bourses spurred regional investors to cash in gains from an early-year rally.

World markets suffered from the twin setbacks of a surprise drop in Chinese factory activity in May and U.S. Federal Reserve Chairman Ben Bernanke's comments signalling the bank may trim its bond purchases at one of its next policy meetings.

MKTS/GLOB

Oil LCOc1 fell below $102 a barrel as the market worried about weak demand going forward. O/R

In Egypt, the main benchmark .EGX30 fell 1.4 percent, extending 2013 losses to 2.2 percent.

Foreign investors were net sellers, taking their cues from a risk-off attitude on global markets. Bluechips, their usual target, weighed on the measure.

Property developer SODIC OCDI.CA fell 3.2 percent after reporting an 83 percent drop in first-quarter profit due to fewer deliveries of flats and houses to buyers. ID:nL6N0E32J8

"Sodic published a strong set of preliminary results, with one glaring exception which were revenues," Loic Pelichet, assistant vice-president of research at NBK Capital said in note.

"It would seem that this is just an issue of quarterly deliveries timing. We remain buyers of the stock, and would use any weakness potentially generated by the revenue mix as a strong opportunity to add or enter."

Elsewhere, Bahrain's Al Salam Bank SALAM.BH , a little-traded stock, surged 9.1 percent after the lender announced merger plans with BMI Bank, an affiliate of Oman's Bank Muscat BMAO.OM . The tie-up would create the kingdom's third-largest bank by assets. ID:nL6N0E40MH

Dubai's benchmark .DFMGI slipped 0.8 percent, down for a third day in four since Sunday's 42-month high.

"The correction in our markets was timed well with Bernanke's comments, which (sparked) fears that stimulus may be cut back soon," said Firass Yaish, business development manager at One Financial Markets.

"The fact that the losses aren't sharp shows that local sentiment is intact and bulls will start racing again."

Shares in builder Arabtec .ARTC.DU recovered early-session losses that were triggered by the company receiving regulatory approval for a $650 million rights issue. This will open on June 9. ID:nL6N0E4041

The stock ended 1.7 percent higher, having been down as much as 3.8 percent intraday.

Abu Dhabi-listed Aldar Properties ALDR.AD and Sorouh Real Estate SOR.AD each dipped 2.1 percent. The UAE capital's index

.ADI retreated 1.2 percent, trimming 2013 gains to 31.5 percent.

Elsewhere, the Qatari measure .QSI declined 0.4 percent, easing off Wednesday's 28-month high.

THURSDAY'S HIGHLIGHTS

DUBAI

* The index .DFMGI slipped 0.8 percent to 2,306 points.

ABU DHABI

* The index .ADI fell 1.2 percent to 3,460 points.

QATAR

* The benchmark .QSI declined 0.4 percent to 9,049 points.

KUWAIT