Abu Dhabi - Arabstoday
The region\'s stock markets are likely headed for a decline on increased selling pressure in the week ahead. The expected fall is in line with the bearishness on the developed and emerging markets on growing fears of a double dip recession in the US, faltering global economic recovery and the possibility of sovereign debt defaults in Europe. Share prices in Saudi Arabia, the only regional market to keep trading open on Saturdays, fell the most in two weeks on Saturday after reports showed the global economic recovery is slowing, dampening investor appetite for riskier assets. The 147-company Tadawul All Share Index fell 2.6 per cent, the sharpest intraday decline since August 9, to 5,924.39, at 12.58pm in Riyadh, extending this month\'s slump to seven per cent. Article continues below \"The regional markets will mirror what\'s happening in the US. There\'s no positive news... there\'s no catalyst for the regional markets to go up,\" a Dubai-based market analyst told Gulf News by telephone. \"I expect the regional markets to be flat in the week ahead with a negative bias. Given the high volatility in global markets, there won\'t be investors rushing to buy stocks,\" he added. May fall farther Emirates NBD\'s Chief Investment Officer for Private Banking Gary Dugan wrote in his latest weekly research note that the markets could fall further. \"Although there is good value in markets there isn\'t outstanding value. The momentum of economic activity is expected to stay negative. Policymakers will probably remain on the back foot. Also investors will still have to weather a further phase of potential credit downgrades when the rating agencies take a hard look at Europe and the European banks,\" he said. \"We continue to urge caution in the absence of good economic news from Europe and the US and few interest rate cuts in the emerging world. Don\'t believe that the situation is going to get better anytime soon. Equity valuations are still not cheap enough to risk buying aggressively,\" Dugan added. Meanwhile, last week the US stock markets tumbled. That sent the Standard & Poor\'s 500 Index to its biggest four-week loss since March 2009. The S&P 500 has sunk 16 per cent since July 22 as about $3 trillion (Dh11 trillion) was erased from the value of US equities. The Dow Jones Industrial Average fell 451.37 points, or four per cent, to 10,817.65 last week, extending its four-week decline to 1,863.51 points. European shares flirted with two-year lows on Friday, extending the previous session\'s sharp sell-off, as fears of a global recession and a short-funding crunch for regional banks intensified. Asian stock markets also declined on Friday, with index heavyweights coming under selling pressure as investors shifted money out of riskier assets on worries over slowing global economic growth.