Abu Dhabi: The region's stock markets are likely to move sideways with a downward bias in the week ahead as global investors have increasingly become risk-averse over the past one month due to the Eurozone debt crisis, which experts fear is deepening.
"The global markets are in a risk-off mode. I would expect the regional markets to trade sideways until we get some resolution from Europe with regard to the Greek situation," Mark Watts, head of fixed income, asset management group at the National Bank of Abu Dhabi told Gulf News.
"There has to be more clarity from Europe for trading volumes to increase in the region. We believe, once the current uncertainties are removed, investors will return to the regional markets to pick up value securities," Watts added.
Dysfunctional
Gary Dugan, chief investment officer - private banking at Emirates NBD said the Eurozone remains dysfunctional with policy makers falling out with each other and the credit markets deteriorating.
"The Eurozone lurches from political crisis to political crisis. We cannot stress enough the risks of further downside to the Euro zone banks sector," wrote Dugan in his latest research note.
"Whilst the IMF and Euro zone governments may run around saying that the situation is not as bad as it seems, private sector analysts are estimating that the Eurozone banks will need to raise around €50 billion (Dh253.82 billion) to plug the gap on any reasonable writedown of the value of the sovereign debt of the periphery countries," he added.
Losses checked
The US stocks were little changed on Friday as investors booked profits after a four-day rally, but optimism that European leaders were on the right track in tackling the region's debt problem kept losses in check.
European stocks rose for a fourth day on Friday as finance ministers met in Poland to discuss how they could implement expansion of the region's bailout fund.
On Friday, Asian stocks rose too, trimming losses on the regional benchmark index, after the European Central Bank and international policy makers coordinated to lend dollars to Euro-area banks, increasing confidence the region's debt crisis could be contained.
