UAE stock markets are bracing themselves for a period of volatility amid renewed fears of a potential Greek debt default. The Dubai Financial Market (DFM) General Index slumped 4.82 per cent yesterday, the most in nearly two years, to 1,607.77 as local investors rushed to book profits from the recent bull-run rally ahead of a key deadline today for a Greek debt swap deal. Abu Dhabi\'s bourse also declined, tumbling 2.17 per cent to 2,553.32, taking its cue from earlier losses across Asian equities. \"UAE markets were due for a correction and that has been triggered by declines across global financial markets, which have been under severe pressure on renewed fears around Greek debt and China\'s lower economic growth target,\" said Rami Sidani, head of Middle East investments at fund manager Schroders. Local bourses have rallied strongly this year, fuelled by positive sentiment and an improvement in risk appetite, but it has mostly been led by small caps while blue chips have lagged behind. \"There is now an opportunity for investors to position themselves in fundamentally robust companies that trade at a compelling valuation,\" he added. European markets registered gains yesterday, rebounding from their biggest drop since November on Tuesday, but uncertainty is likely to prevail in the short term over the outlook for the global economy. \"The Greece situation is full of emotional ups and downs and that will continue until there is certainty over the private sector involvement portion of the debt,\" said Robert McKinnon, chief investment officer at ASAS Capital. \"Once that is beyond us, markets will respond positively as it will be priced in quickly either way; at the moment markets do not know what to price in and that creates volatility,\" he added. McKinnon says a spell of profit-taking should be expected in the UAE considering how far local markets have come in a short period of time. \"When there is uncertainty, people take what they have got; they do not try to squeeze an extra five per cent as it is not a big deal to get that little bit more. Furthermore, some stocks have moved a bit too far on speculation. UAE markets have been illiquid for quite some time, so prices tend to pick up pretty quickly when volumes return,\" he said.