Abu Dhabi: The regional stock markets are likely to consolidate in the week ahead after having recovered from their lows triggered by civilian unrest in Libya and public demonstrations in Bahrain, Oman and Yemen, say market analysts.
"I believe the markets will try to consolidate at the levels of last week. If we don't see a break above key resistance points we will probably see some profit-taking," Mohammad Ali Yasin, chief investment officer at CAPM Investment, told Gulf News by telephone. "I don't see strong selling pressure in the week ahead as there was no increase in Middle East tensions as was widely anticipated."
Yasin said there was relief in Saudi Arabia yesterday which should set the tone of other regional markets in the week ahead.
"Mena [Middle East and North Africa] markets look like they have the scope to rebound after such a precipitous fall. The selloff of the Dubai market looks overdone. For those brave investors willing to take risk, we would recommend buying the local equity markets," said Gary Dugan, Emirates NBD's chief investment officer - private banking, in a research note.
However, the havoc caused by the powerful earthquake and tsunami in Japan on Friday and its impact on the world's second largest economy will clearly be tracked by the global markets when they reopen.
Last week, US stocks fell, sending the Standard & Poor's 500 Index to the lowest level since January 31, after American and Chinese reports dampened optimism about the global economy.
European stocks posted their third week of losses last week as Spain and Greece suffered ratings downgrades.
Asian stocks fell too last week as conflict escalated in the Middle East and the earthquake shook Japan in the final minutes of trading on Friday.
