Greek election brings relief to Gulf markets

Stock markets in the Arabian Gulf rose yesterday amid improved investor sentiment after pro-bailout parties came out on top in Greece's elections.The results helped to ease worries over the debt-ridden country's potential plans to exit the euro. The Dubai Financial Market General Index increased 0.6 per cent, to 1,473.63, marking its first move into positive territory in a week. Meanwhile, the Abu Dhabi Securities Exchange gained 0.5 per cent to close at 2,460.14. Greece's largest pro-austerity and bailout parties, New Democracy and Pasok, won enough ballots to form a parliamentary majority, according to an official projection by the country's interior ministry. But the initial euphoria might be short-lived, analysts warned, as focus will soon turn to the expected political wrangling to form a coalition government. "There is still a lot of uncertainty," said Marwan Shurrab, the chief trader at the asset manager Gulfmena Investments in Dubai. "We need to wait to see how the coalition government will be set up and which direction it plans to move towards, whether they will seek to renegotiate or fully accept the austerity plans." Spain's borrowing costs also surged after figures showed bad loans increased from 8.3 per cent in March to 8.7 per cent in April. Yields on Spain's 10-year government bond rose 22 basis points at 7.025 per cent. Elsewhere in the region: Kuwait's measure gained 0.6 per cent to 5,948.62; Bahrain's index slipped 0.1 per cent to 1,130.31; Oman's index was unchanged at 5,708.83; Qatar's QE Index added 0.3 per cent to 8,276.62. The Saudi Tadawul All-Share Index closed up 0.79 per cent to 6,807.51.from the national.