* Omantel falls after revealing $846 million Zain purchase
* Abu Dhabi's TAQA falls despite swinging to profit
* Saudi builder Khodari surges in unusually heavy trade
* Banks weigh on Qatar
* Analyst says Egypt inflation may fall sharply at year-end
DUBAI, Aug 10 (Reuters) - Gulf stock indexes moved sideways on Thursday, continuing a two-week-old trend, but Kuwaiti telecommunications firm Zain surged in response to an investment by Omantel. Egypt's bourse dropped after data showed a fresh rise in inflation to above 30 percent.
Kuwait's index rose 0.3 percent as Zain gained 4.4 percent to 0.471 dinar in its heaviest trade since March after agreeing to sell 425.7 million treasury shares, equivalent to 9.84 percent of the firm, to Omantel for $846 million or 0.60 dinar per share. The stock came well off the day's high of 0.505 dinar.
The purchase, subject to regulatory approval, was announced days before Oman is to shortlist qualified applicants for a third mobile licence, for which Zain has bid. Omantel, which is making the investment to diversify beyond its small home market and has been trading near multi-year lows, fell 1.3 percent in its heaviest trade since November.
Dubai's index edged up 0.1 percent as Shuaa Capital , which has been trending down for the past couple of weeks, rebounded 2.5 percent.
Abu Dhabi's index edged down 0.1 percent as Abu Dhabi National Energy Co (TAQA) dropped 2.0 percent after reporting a small profit in the three months to June, swinging from a year-earlier loss.
The Saudi Arabian index edged up 0.2 percent as Al Rajhi bank gained 0.8 percent. Construction firm Khodari surged 6.8 percent in unusually heavy trade.
Saudi Printing and Packaging climbed 3.0 percent to 23.06 riyals in its heaviest trade since May 2016 after rising on Wednesday above technical resistance on its December peak of 21.85 riyals.
Arabian Cement edged down 0.2 percent after reporting that second-quarter net profit plunged to 35.5 million riyals ($9.5 million) from 141 million riyals a year ago, missing the 71.7 million riyal average forecast of analysts.
Qatar's index dropped 0.7 percent because of weak banks; the biggest, Qatar National Bank, lost 0.7 percent.
In Egypt, the index dropped 0.9 percent in a broad-based decline after official data showed annualised urban consumer price inflation jumped in July to 33.0 percent, the second highest rate on record, from 29.8 percent in June following fuel price hikes.
However, London-based Capital Economics said one-off boosts to inflation such as the fuel price rises had now peaked so inflation should fall back in coming months to below 20 percent around the end of this year, allowing monetary policy to be eased.
* The index rose 0.2 percent to 7,165 points.
* The index edged up 0.1 percent to 3,647 points.
* The index edged down 0.1 percent to 4,551 points.
* The index lost 0.7 percent to 9,243 points.
* The index dropped 0.9 percent to 13,462 points.
* The index rose 0.3 percent to 6,845 points.
* The index edged up 0.1 percent to 1,324 points.
* The index edged down 0.1 percent to 4,992 points. (Reporting by Andrew Torchia; Editing by Andrew Bolton)