Dubai: Two meetings this week, one on whether the European Central Bank (ECB) will expand its economic stimulus and another on whether the Organisation of Petroleum Exporting Countries (Opec) will raise output, are expected to keep investors on edge this week.
A clampdown by Chinese stock market regulators and the possiblity of the first interest rate hike by the US Federal Reserve in nearly a decade will also likely keep the pressure on.
On Friday, the main US indexes ended steady, with minor cuts on European stocks. The Euro Stoxx 50 ended 0.28 per cent lower at 3,488.99. In Asia, Chinese stocks tumbled more than 6 per cent on the back of a clamp down on local brokerages by the regulator.
“US and European markets may come under pressure as Fed is going to take a decision,” Muhammad Shabbir, head of equity funds and portfolios at Rasmala Investment Bank, told Gulf News.
Sebastien Henin, head of asset management at The National Investor also agreed with Rasmala’s Shabbir. “The Fed would raise rates and send a clear signal saying its only 25 basis points. I suspect that would not have major impact on the equity markets as all, as this news have been priced in,” Henin added.
The US Federal Reserve meets in the middle of the month, where the central bank is widely expected to hike rates for the first time in nearly a decade.
Slippery oil
On Friday, WTI slumped more than 3 per cent to be at $41.71 per barrel, while Brent crude was down 1.32 per cent at $44.86.
“Oil prices may come under pressure although much would depend on the Opec decision,” Shabbir from Rasmala Investment Bank said.
“If the tilt is towards taking a decision which might help petrochemicals, these scrips may recover,” Shabbir said.
Oil has slumped 37 per cent in the past year as US crude inventories climbed.
