Gulf markets could see gains, but investors wary

Gulf markets may see some gains on Monday but investors hold a cautious approach after France and Germany pledged to solve the Eurozone debt crisis before the end of the month. "The danger is still the European story and the move by the leaders will be closely watched but we need to see the plan before we can react," says Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading. "The sentiment is still very cautious." Asian shares struggled to make gains on Monday as Hong Kong and China stocks dragged, with investors reacting to fears of a possible "hard landing" in the world's second-largest economy. Third-quarter earnings season, which kicked off late last week, is expected to have little impact as fundamentals take a back seat to developments in Europe, investors say. Oman International Bank surged to an 18-month high on Sunday over its merger talks with HSBC's Oman operations, and other Gulf bourses also advanced on hope that the European debt crisis would be resolved.