Abu Dhabi Regional stock markets are likely to be range-bound with a slight upside bias in the week ahead as investors keep a close eye on developments in the US and European markets for direction, say market analysts.

"The volumes in the share markets will likely remain low. Qatar's market is expected to slow down a little bit and investors will keep an eye on developments in Saudi Arabia which will shortly be announcing its budget," said Chahir Hosni, sales manager with EFG-Hermes.

UAE pointers

"The UAE markets should rebound a bit from last week's lows," he added.

Gary Dugan, chief investment officer for private banking at EmiratesNBD, said that in the Middle East and North Africa (Mena) region, bullish signals continue in the fixed-income market.

"Despite the strong rally in treasury yields, prices of Mena bonds have remained very steady. A new HSBC industrial confidence index for the GCC indicates strong growth in the region. Saudi Arabian data looks among the strongest in the GCC with the UAE holding steady," Dugan added.

Analysts also say with international oil prices in the $80-$90 range, GCC economies are in a position to increase expenditure to spur economic growth, which augurs well for the coming year as far as the regional stock markets are concerned.

On Thursday the Dubai Financial Market (DFM) index rose 0.56 per cent to close at 1,639.06. In Abu Dhabi, the ADX general index ended the week 0.02 per cent lower at 2,715.55.

Last week, US stocks rose for a third week, sending the Standard & Poor's 500 Index to a two-year high, as stronger-than-estimated data on retail sales, manufacturing and housing boosted confidence in the economic recovery.

The S&P 500 rose 0.3 per cent to 1,243.91, completing a three-week rally, the longest stretch since Nov-ember 5.

The Dow added 81.59 points, or 0.7 per cent, to jump to 11,491.91.

However, European stocks halted a two-week rally as better-than-estimated US economic data failed to allay concern that the sovereign-debt crisis will spread from Greece and Ireland to other euro-area nations.