DUBAI, Jan 9 (Reuters) - Dubai's stock market may continue to extend gains on Monday as global markets edge higher, while Saudi Arabia's index is likely to be dragged by profit-taking ahead of fourth-quarter results and as small movements in oil prices offer little sway.
MSCI's ex-Japan Asia-Pacific shares index rose 0.3 percent and Brent crude futures were trading at $56.83 per barrel in early trade, down 0.5 percent from Friday's close.
Dubai's main index, last at 3,692 points, was technically bullish, trading above the 200-day simple moving average and closed on Sunday above technical resistance at the mid-December peak of 3,659 points. A second straight close above that level would confirm a break, leaving the next chart barrier at the October 2015 peak of 3,740 points.
Although the majority of the active stocks on Sunday were the small- and mid-sized ones, many investors believe that the market still has further upside as valuations continue to be supportive. The index is trading at a price-to-earnings ratio of 9.7 times, a discount to regional markets.
But Saudi Arabia's index, which has lost 1.0 percent since the start of the year despite a 3.0 percent climb in Brent futures, may continue its descent as investors ready their portfolios for fourth-quarter results and cash out of a market that has risen about 20 percent since November.
Many of the petrochemical shares, which are the most vulnerable to changes in oil prices, are perceived by analysts to be fairly priced with some trading at a premium, leaving investors with little room to add further.
"Some of the large-cap shares, which offer attractive dividends, will continue to hold firm, investors will not cash out before their respective distribution days," said a Jeddah-based analyst.
Reporting by Celine Aswad; Editing by Amrutha Gayathri