Gulf markets 'could react badly' to bailout failure

TAKING STOCK: Gulf markets are likely to react badly to news of the failed US $700 billion bailout. (Getty Images)

The largely sentiment-driven Gulf stock markets are likely to react negatively to news that a $700 billion bank rescue package was rejected by the US Congress.

“Gulf markets have been particularly dogged by sentiment,” Oliver Cornock, GCC editor at Oxford Business Group, said.

“Sentiment has been a big thing, because essentially, the fundamentals in the Gulf are much stronger than elsewhere. There is much more liquidity and a relatively robust outlook.

“The decision last night (Monday) not to approve the bailout…will be further damaging towards sentiment, which I believe is central to the problem of the regional stock markets.”

But he declined to speculate on how Gulf markets would open after the Eid holiday.

“I think it’s very difficult to call how a market would open on Sunday when we’ve still got four full days of trading in the West to go.”

US bailout rejected, fear seizes markets
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