Dubai index at 11-week low

Gulf markets are likely to extend their declines on Monday as worries heighten on euro zone's ability to solve its debt crisis after elections in Greece and France saw incumbents defeated, leading to a sell-off in global risk assets. Most local markets were lower a day earlier after weak jobs data from US dampened sentiment on the country's recovery. "Our markets will take the lead from global cues and will continue to do so for the short to medium term until the next earnings season," says Amer Khan, fund manager, Shuaa Asset Management. "Investors, especially retail, looking to go away for the summer will book their gains but that will be offset by bargain hunters, who have been waiting on the sidelines." Socialist Francois Hollande swept to a presidential election victory in France, but he faces a short honeymoon with financial markets eager for clear signals on his policies and how hard he plans to push back against German-led austerity. In UAE, Dubai's index fell 1.4 percent a day earlier to 1,560 points, its lowest close since Feb. 16. "Next support is around the 200 period exponential moving average on the daily chart at 1535.73," says Bruce Powers, head of research and analysis at Trust Securities. "A deeper decline could see the market index get down as low as the 1476 price level. A decent bounce could come at either of those two price levels." Dubai-listed budget carrier Air Arabia will be in focus after saying first-quarter net profit rose 11.7 percent, beating analysts' forecasts. Contractor Drake and Scull may see added pressure after brokerage NBK Capital cut its rating to 'accumulate' from 'buy'. Elsewhere, risk assets from oil to shares slumped on Monday after elections in Greece and France fuelled questions about commitments from struggling euro zone economies to pursue austerity policies seen widely by markets as vital to resolving the bloc's debt crisis.