DUBAI, Nov 16 (Reuters) - Middle East markets are likely to remain weak on Monday as a bleak long-term outlook for oil prices and a downbeat opening on Asian bourses offer little incentive for traders to buy back beaten-down stocks.
Saudi Arabia's benchmark tumbled to a 35-month low on Sunday, Dubai hit an 11-month low and Egypt's close was its lowest since December 2013 in a region-wide equity sell-off.
That slump followed a renewed drop in oil prices. Crude benchmarks lost 8 percent last week to be more than 50 percent below 2014 peaks and Gulf investors seem to have belatedly realized such a big hit to state finances will also impact listed companies' earnings, especially as most heavyweight stocks are at least partly state-owned.
"(The) outlook remains bleak for the next one-two years at least," said Shakeel Sarwar, head of asset management at Securities & Investment Co (SICO) in Bahrain.
He said Gulf markets were being re-rated following the oil price slump.
This year, Egypt's index is down 27 percent, while the Saudi and Dubai benchmarks have each lost 17 percent.
"Markets could fall another 5-10 percent from here because of poor sentiment and negative momentum, but for long-term investors and stock pickers the markets have already started throwing up interesting investment opportunities," said Sarwar.
"Hence, another 10 percent decline should entice many long-term and institutional investors to make fresh bets on the long-term outlook of Gulf markets."
Dubai's index ended Sunday at 3,146. It has support at 3,069 and then 2,992, said Bruce Powers, chief technical analyst at marketstoday.net.
"Given Sunday's action it looks like we may reach that level and it could be on Monday," said Powers.
"I wouldn't expect Dubai to fall much further than that before we see a decent bounce."
Asian stocks hit six-week lows on Monday and emerging market currencies wilted as investors sought the safety of the greenback in the wake of Friday's deadly attacks in Paris and downbeat economic data.
Oil rose, with U.S. Light Crude and Brent Crude up 0.9 and 1.2 percent respectively as of 0504 GMT, but analysts said oil and other commodities were expected to remain under pressure as oversupply weighs on prices. (Reporting by Matt Smith; Editing by Subhranshu Sahu)