Euro Fears Curb Gulf Rebound
Now Reading
Euro Fears Curb Gulf Rebound

Euro Fears Curb Gulf Rebound

Mounting concerns around a Greek exit from the Euro have dampened Gulf economic sentiment.

Gulf Business

The immediate outlook for Gulf Arab stocks continues to be subdued, despite small rebounds in Asian shares and oil prices on Monday, as the euro zone crisis remains centre-stage in investors’ minds.

Markets in Asia recovered some ground after heavy losses on Friday as investors looked to pick up undervalued stocks.

But concerns around a ‘Grexit’ – a Greek exit from the euro zone – prevented the yen, widely perceived as a safe haven, to ease significantly from its three-month high against the dollar of 79.001 yen hit on Friday. The yen stood at 79.18 on Monday.

“We have seen Saudi recover yesterday and Asia is a bit upwards this morning but the pressures on the equity markets coming from the euro zone will be overwhelming, even if we see some rebound,” says Mohammed Yasin, an Abu Dhabi-based capital markets specialist.

Most Gulf Arab markets ended Sunday in the red as investors reacted to Friday’s global sell-off – the exception being Saudi, which rose slightly after heavy selling on Saturday.

Egypt’s index dropped two per cent to a four-week low, as investors cut their exposure to the market on the last official day of campaigning for a presidential election whose outcome is still tough to call.

Volumes on Gulf Arab bourses slumped on Sunday as investors remained wary of deploying capital in volatile global markets.

Trading in Oman, Saudi Arabia and Egypt were at three-month, three-and-a-half month and four-month lows respectively, with Dubai only marginally better than Thursday’s four-month nadir.

Oil prices recovered on Monday, with U.S. crude up 0.5 percent to $91.91 a barrel, after falling more than 1 percent on Friday. Brent crude, which hit a 2012 low on Friday, rose 0.7 percent to $107.88 a barrel.

You might also like


Scroll To Top