Abu Dhabi: Regional stock markets are likely to witness a correction early this week as investors may be keen to book profits and build new positions, market analysts told Gulf News.
"I am expecting a correction in the Qatar market and possibly in Saudi Arabia as well. These markets have performed strongly in recent days," said Chahir Hosni, sales manager with EFG-Hermes.
"Overall, in the medium-term, the regional markets, which have been lagging most of the emerging markets are likely to gain momentum from higher global oil prices which are close to $100 (Dh367) a barrel," he added.
Another regional market analyst said the markets are likely to move sideways in the week ahead with thin volumes of shares set to be traded.
"Over the next six months, the markets in Saudi Arabia, Qatar and Egypt will outperform other regional markets. Saudi Arabia because of higher oil prices, Qatar due to the football World Cup and Egypt due to the fund flows from the west.
"As far as the UAE markets are concerned, there need to be more initial public offerings (IPOs) and more listings for the markets to move higher," he added.
On Thursday, the Dubai Financial Market (DFM) index closed 0.18 per cent lower at 1,624.94. In Abu Dhabi, the Abu Dhabi Securities Exchange (ADX) general index fell 0.08 per cent to end the week at 2,737.65.
Last week, US stocks rose for the seventh week, the longest rally since May 2007, buoyed by optimism about corporate earnings and European efforts to control the region's debt crisis.
The S and P 500 rose 1.7 per cent to 1,293.24 in the five days ended January 14, the biggest gain in five weeks and its highest level since August 28, 2008.
The Dow Jones Industrial Average added 112.62 points, or one per cent, to 11,787.38, the highest since June 2008.
European stocks advanced for a second week as investors speculated that the European Union will increase its efforts to contain the region's debt crisis. However, on Friday, the MSCI Asia Pacific Index slipped 0.1 per cent to 139.50, retreating from a two-and-a-half-year high, while China's Shanghai Composite Index dropped 1.3 per cent.
