Gulf trading is likely to remain cautious in the last session before European Central Bank's policy meeting later on Thursday, but risk appetite is back on after reports ECB will buy unlimited amounts of short-term sovereign bonds.
Investors will also be watching out for key US payrolls data on Friday, which could give cues on whether Federal Reserve will announce further monetary easing in its September 12-13 meeting.
"Expect out markets to be flat... All eyes will be on the ECB announcement," says a Dubai-based trader who asked not to be identified. "I'm expecting it to be very positive but oil prices will not go much higher."
Investors say if ECB fails to deliver on policy action, markets could suffer a sell-off but local markets have not rallied in the run-up to the announcement and should be steadier.
"Not much is priced into regional markets. Third-quarter earnings will be the main driver," says the trader.
In Kuwait, the top court will announce on September 25 whether current electoral boundaries are constitutional, a ruling that could spark protests in the increasingly politically divided oil producer.
The government asked the court to rule on a 2006 law that divides Kuwait into five constituencies, a move some opposition figures say is a bid to abolish the current boundaries and gerrymander victory in elections expected this year or next.
Kuwait's benchmark has rallied in the last three-weeks on improving fundamentals, but the market slumped to an eight-year low on August 12 amid worsening political and financial situation.
Etisalat, the UAE's biggest telecommunications company, said it has decided not to bid for airwaves in an Indian state auction scheduled in November.
Etisalat earlier this year shut down its Indian mobile operations, after a court ordered to revoke cellular permits including those granted to its local affiliate in a scandal-tainted 2008 sale.
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