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Sun 12 Jun 2011 10:36 AM

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Gulf markets seen lower as global shares weigh

Global stock markets fell for a fifth week in six last week on economy fears

Gulf markets seen lower as global shares weigh
Gulf markets are expected to face selling pressure on Sunday

Gulf markets are expected to face selling pressure on Sunday, tracking a downbeat global news flow and losses in international shares.

Global stock markets fell for a fifth week in six last week on growing worries about the global economy after data showed China's export growth slowed in May.

"Overall, we should have a negative day across the region, because the news flow is negative globally," says Shahid Hameed, head of asset management for Gulf at Global Investment House.

"Any losses should be limited, because our markets have been under pressure recently. I don't think we should see any panic selling."

Oil prices fell on Friday on news Saudi Arabia was offering more oil to Asian customers, with additional pressure from a stronger dollar and weak equities. Brent crude for July delivery fell 79 cents to settle at $118.78 a barrel a day after closing at a five-week high.

Saudi Arabia's index fell 0.5 percent on Saturday to an 11-week low, taking cues from oil's Friday drop.

Doha's index fell, tracking downbeat regional markets, but analysts say Qatar's long-term fundamentals should draw back investors.

Doha's benchmark slipped 0.2 percent to 8,267 points as investors booked gains from Thursday's 1.1 percent rise, its largest one-day gain in a month. The benchmark was down 4.9 percent in 2011

"Qatar has corrected quite substantially recently, but there is no clear current trend," said Sachin Mohindra, senior vice-president, portfolio manager at Invest AD.

"Qatar is a market people love on a long-term fundamental. Eventually, if funds will return to any country, it will be Qatar."

Qatar's economy is forecast to grow 15.8 percent in 2011, according to a Reuters poll in March.

On May 30, the chairman of Qatar's bourse said the country would not increase foreign ownership limits on stocks in 2011 - a key isuse for an MSCI index upgrade.

"Foreigners moved money out on the foreign ownership limit announcement and other negative news related to the FIFA World Cup 2022," said Mohindra.

Industries Qatar slips 1.4 percent and Qatar Electricity and Water is down 0.7 percent.