REUTERS

DUBAI MOST Gulf markets kicked off their trading week on a dampened mood and recorded losses on Sunday after Standard & Poor’s downgraded several euro zone countries, while Egypt extended its rally.

S&P downgraded Italy, Spain, Portugal and France, while Germany’s rating was left unchanged.

Dubai’s benchmark slumped to a new seven-and-a-half year low, dipping 1 percent and Abu Dhabi’s benchmark declined 0.7 percent to close at its lowest since December 21.

“A lot of the downgrades were expected but it brings Europe’s problems to the frontlines and enhances the negative sentiment,” said Rami Sidani, Schroders Middle East head of investment.

Bellwether Emaar Properties slipped 2.4 percent and Emirates NBD shed 2.2 percent.

Abu Dhabi-listed Dana Gas dropped 7.5 percent to close at an all-time low, while Sorouh Real Estate fell 4.2 percent, also a record closing-low.

Qatar’s index ended 0.7 percent lower, down in six of last seven sessions.

Masraf Al Rayan fell 2.4 percent, Industries Qatar slipped 0.8 percent and Qatar National Bank eased 0.3 percent.

“In short-term as long as there are no large moves in international markets, Q4 results will determine market direction,” Sidani said. “We expect strong earnings in Qatar with the banking sector to post strong loan growth.” “The downgrading of Europe is adding more pressure on the companies that still have foreign ownership in them,” said Mohammed Yasin, CAPM Investment chief investment officer.

“That will spread to all regional markets during this week, especially if European markets go through a sell off when they open tomorrow,” he added.

In Saudi Arabia, the index eased 0.04 percent to halt a three-session rally but volumes hit a three-week high. Trader bet the kingdom’s bourse will soon open up to foreigners.

The market has traded 69 billion riyals ($18.4 billion) so far this year, up from 36 billion riyals a year earlier.