Regional stocks under selling pressure

Abu Dhabi: Regional stock markets may come under selling pressure this week in the absence of strong local catalysts and due to fears that the US economic recovery will grind to a halt, which would bring back the spectre of yet another global recession, UAE-based market analysts told Gulf News on Friday.

"The trend in the regional markets is not clear and investors need to be cautious. All markets in the Gulf Cooperation Council (GCC) countries are underperforming except Saudi Arabia," said Mousa Haddad, Head Trader with National Bank of Abu Dhabi's Asset Management.

"The regional markets are going to move sideways unless there's a catalyst for the markets to move up or down. There's going to be high volatility and the trading volumes are expected to remain low," said Ahmad Hamdy, a market analyst.

US Treasury two-year notes rose for a 10th week in the longest rally since 1986 as private employers added fewer jobs in July than forecast, spurring concern that the Federal Reserve may be forced to add stimulus.

Yield slides

The yield dropped below 0.50 per cent for the first time before the central bank's policy meeting this week.

"The latest job numbers in the US haven't been very encouraging.

"This may build further pressure on the regional markets when they trade," Hamdy added.

Last week US stocks advanced and the Standard & Poor's 500 Index climbed to the highest level since May after companies from Pfizer to News Corporation beat earning estimates and reports showed expansion in the service and manufacturing industries.

On Friday, shares of ExxonMobil rose 3.8 per cent after oil rose to $80.70 (Dh296.36) a barrel.

Asian stocks rose for a fifth consecutive week, the longest winning streak in more than a year, after companies reported higher earnings or raised forecasts.

However, European stocks fell, reversing earlier gains, after a government report showed overall employment in the US declined more than forecast.

In the UAE, while the Abu Dhabi Securities Exchange (ADX) general index fell 0.24 per cent to 2,529.40 on Thursday, the Dubai Financial Market (DFM) index gained 0.31 per cent to close at 1,517.78.