Most Middle East markets edged lower on Monday on lingering investor concerns about slowing global growth but declines were stymied after the European Central Bank said it was buying bonds of euro zone strugglers Italy and Spain. The Saudi market, the largest Arab bourse, ended 0.3 percent lower, after recovering slightly on Sunday, following its drop to a five-month low on Saturday on a US downgrade.
The US rating downgrade by Standard & Poor's sent regional bourses to lows of at least several months on Sunday, with an uncertain debt situation in Europe weighing. --- Egypt bourse falls to fresh two-year low "The downgrade is not a major issue for US, it can survive with such a rating but the bigger issue is the outlook on global growth," said Marwan Shurrab, vice-president and chief trader at Gulfmena Investments in Dubai.
"The GDP numbers in the last week show slowness in growth and the recovery is not going as expected," he added. Egypt's main index extended Sunday's 4.2 percent decline, slipping 2 percent to a fresh two-year low as retail investors continued a bout of selling begun by foreigners. Orascom Construction Industries lost 2.5 percent. Orascom Telecom dipped 3.8 percent and EFG-Hermes fell 4.6 percent.
Dubai's index ended slightly lower, giving up modest earlier gains. It lost 0.8 percent, after slumping to a 20-week low on Sunday. Abu Dhabi's index rose from Sunday's 10-week low, ending up 0.4 percent. Property stocks supported, with Surouh Real Estate and Aldar Properties both closing 0.8 percent higher.
Qatar's index ended 0.8 percent to 8,215 points. Bargain-hunting helped limit declines in Oman, whose benchmark ended 0.8 percent lower. "Overall the risk reward ratio is turning positive with the market pricing in for most of the uncertainties," said Kanaga Sundar, head of research at Gulf Baader Capital Markets.
"The market is going beyond fundamentals right now and is looking more at risk aversion. Already our market has underperformed for the current year and we may see institutions bottom-fishing for blue chips," he added. Bank Muscat fell 0.9 percent. Oil and gas industry services firm Renaissance Services slipped 2 percent.