World stocks rebounded from a 10-day rout as investors looked to the US Federal Reserve to calm markets, though rallies in gold and the Swiss franc showed some were clinging to safe assets.The Saudi stock market continued to drop with the Tadawul All-Share Index (TASI) reduced its losses during the day to 0.81 percent at 6,008.67points, after it plummeted 4.27 percent at opening."The market is on a very attractive level now in terms of valuation," said Hisham Tuffaha, division head of Asset Management at the Riyadh-based Bakheet Investment Group. He said the low trading value contributed to volatile trading. “The plunge in global equity and oil markets is a great concern for Saudi investors,” Tuffaha added.Markets in the UAE and Qatar fell back to their lowest levels since March, when the Middle East was hit by political unrest. Reuters reported that Dubai’s index fell 2 percent to 1,444 points — its lowest close since March 9, raising year-to-date losses to 11.4 percent. Abu Dhabi’s benchmark dropped 1.3 percent to 2,578 points - its lowest close since March 8. “It is clear that the Gulf markets are taking their cues from Asia and the West where bourses have been repeatedly hammered by fears linked to the situation in the US and in Europe. Worries about the oil price are amplifying this effect,” Jarmo T. Kotilaine, chief economist at the National Commercial Bank, said. Although today saw some signs of stabilization in Western markets, the stage is set for persistent volatility and elevated uncertainty, he added. Most of the “recovery” seems to have been linked to short-term bargain hunting. “In terms of fundamentals, it is clear that the US downgrade has opened the way for further reassessment of other issuers with potentially pernicious effects while the onset of austerity and the minimal room for conventional monetary tightening point toward a weakening of the broader economic situation. This is underpinning the mounting fears of a double dip, a situation the world is poorly prepared for,” Kotilaine said.“We are potentially looking at a return to the ‘GCC paradox’: Markets depressed by external factors even in the face of strong domestic fundamentals and earnings,” he added.Qatar’s index shed 1.8 percent to close at 8,071 points - its lowest level since March 8. “As the dust settles, a lot of regional investors will look at their backyards and feel more confident,” Reuters quoted Shakeel Sarwar, head of asset management at investment bank SICO in Bahrain, as saying. “Yes, nobody wants to catch a falling knife but there are good buying opportunities out there.” Elsewhere, Oman’s benchmark slipped 1.8 percent to 5,505 points, crossing a two-year low. In Kuwait, the index fell 1.3 percent to 5,882 points, hitting a fresh seven-year low. The Bahraini index slipped 0.7 percent to 1,265 points.
