Abu Dhabi: The region's stock markets are likely to come under selling pressure this week following credit rating agency Standard & Poor's downgrade of nine countries in the Eurozone — with the level of sell-off depending on how the global markets react to this development, analysts say.
"The downgrade is definitely going to be negative for all markets, including regional ones. However, their full impact will be felt only during the latter half of the week when we get to see international markets' reaction," Mohammad Ali Yasin, chief investment officer at CAPM Investment told Gulf News by telephone.
"We will probably see a strong regional markets reaction. However, it will fall short of a major sell-off as, fundamentally, economies in the region are strong and international oil prices are still close to $100 (Dh367) a barrel," he added.
In his latest weekly research note, Gary Dugan, chief investment officer for private banking at EmiratesNBD, wrote: "Global equities face uncertainty. Although the US economy has given signs of robustness in the latter stages of 2011, investors remain concerned that the unravelling of the Eurozone could ultimately bring a serious setback for the markets.
"At this stage, the greatest worry is over the refinancing needs of Italy, which ranks third in the world with its $428 billion of refinancing, much of which comes in the first half of the year."
Yesterday, Saudi Arabia's Tadawul All Share Index fell 0.3 per cent to 6,464.60 in Riyadh.
On Thursday, the UAE markets closed in the negative territory, with the Dubai Financial Market (DFM) index closing 0.45 per cent lower at 1,327.54 and the Abu Dhabi Securities Exchange general index closing 0.21 per cent lower at 2.360.55.
