Gulf markets seen as euro zone worries weigh

Gulf Arab bourses will again look to global sentiment for direction, with Asian markets lower on Thursday as fears grow that Spanish banks may soon seek a bailout and concerns linger over a disorderly Greek exit from the euro zone. Much of these debt concerns are priced into Gulf markets, but sentiment will continue to be wedded to global share moves due to a lack of local catalysts. "What's not priced in is a disorderly exit or default, whether it is Greece or Spain - if that happens, our markets could see further downside," says Amer Khan, fund manager, Shuaa Asset Management. "We'll do what global markets do until Q2 earnings." Most Gulf bourses extended declines on Wednesday. The cost of insuring against a Spanish default scaled a record high near 600 basis points while Italy, which is also struggling with huge public debt, saw its 10-year yield top 6 percent for the first time since January. In Greece, the outcome of an election next month that may decide whether it remains in the euro was still uncertain as polls showed parties for and against a bailout neck-and-neck. Asian shares are down on Thursday and Brent crude dropped below US$103 per barrel, with prices headed for their biggest monthly percentage drop in two years. From / Arabian Business