Persian Gulf stocks will likely adopt a cautious tone Sunday after a disappointing U.S. jobs report late last week undermined views that the recovery of the world's biggest economy was gaining momentum, while fears of a prolonged recession in Europe will also keep local investors on edge as first quarter earnings season gets underway.
"First quarter earnings will be the first since the markets have taken off," said Paul Gamble, head of research at Jadwa Investment in Riyadh. "If some of the leading companies come in below investor expectations we could see a notable pull back in share prices, given the weaker news flow from global markets in recent days. Alternatively, if company performance is viewed as good, it should support confidence that the rally can continue."
On Friday, the U.S. government said the economy added just 120,000 jobs in March, well short of expectations. Stock and commodity markets were closed, but treasurys jumped, the dollar fell and stock futures dropped about 1%, suggesting the Dow Jones Industrial Average may fall when it reopens after the Easter break on Monday.
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