* Gulf rate hikes no surprise after Fed
* Dubai, exposed to foreign fund flows, hit relatively hard
* United Development outperforms in Qatar on tower sale
* Saudi's Alhokair Group jumps after Marriott deal
* Orascom Telecom rebounds in Egypt
By Andrew Torchia
DUBAI, Dec 15 Most major Middle Eastern stock
markets fell on Thursday after the U.S. central bank raised
interest rates but buying by local retail investors lifted Saudi
The central banks of Saudi Arabia, Kuwait, Bahrain, the
United Arab Emirates and Qatar followed the Fed with their own
0.25 percentage point rate hikes and Oman, which has been
raising its repo rate gradually in recent months, is expected to
continue doing so.
This was no surprise to Gulf equity investors and banking
system liquidity has actually shown signs of improving in parts
of the region as oil prices have climbed. Nevertheless, most
Gulf bourses followed global markets lower on Thursday.
In Dubai, where is more vulnerable to foreign fund flows
than regional peers, the index slid 0.8 percent to
3,554 points. On Wednesday, the index had dropped back below
major resistance on its August peak of 3,624 points - a negative
Heavyweight Emaar Properties dropped 2.2 percent
and its retail affiliate Emaar Malls Group tumbled 4.4
Dubai depends heavily on real estate, retail business and
tourism and a stronger U.S. dollar, which is linked to the UAE
dirham via a peg, could slow those sectors by diminishing
Qatar's index lost 1.3 percent. However, United
Development added 1.8 percent after it said it had
sold Abraj Quartier Tower 2 for 1.25 billion riyals ($343
Saudi Arabia outperformed, rising 0.4 percent,
although trading volume shrank further to a moderate level and
many banks and petrochemicals favoured by institutional
investors were sluggish.
Activity focused on smaller stocks favoured by local retail
investors including Alhokair Group, which surged 6.1
percent after saying it had signed an agreement with Marriott
International to launch a new hotel in the city of
Egypt's index was almost flat as Orascom Telecom
, the most heavily traded share, rebounded 4.0 percent.
It had tumbled 20 percent since its chief executive, billionaire
Najuib Sawiris, announced early this month that he would step
down in January.
* The index rose 0.4 percent to 7,091 points.
* The index fell 0.8 percent to 3,554 points.
* The index fell 0.8 percent to 4,463 points.
* The index slipped 1.3 percent to 10,224 points.
* The index edged up 0.1 percent to 11,326 points.
* The index edged down 0.1 percent to 5,668 points.
* The index fell 0.2 percent to 5,729 points.
* The index edged up 0.03 percent to 1,189 points.
(Editing by Hugh Lawson)