Stock markets in Gulf states are increasingly jittery because of global economic uncertainty and shaky investor confidence and could face a roller-coaster ride ahead, economists said.

Five of the region's seven stock markets are in the red, shedding more than $120 billion since the start of the year despite the listing of a large number of new companies, said a report in our sister publication, the Gulf Daily News.

The seven - including two in the UAE - now have a combined capitalisation of $995 billion.

'Global and domestic factors are impacting the markets, making them fluctuate sharply and become unpredictable... A slide in oil prices in recent months has compounded the impact,' Saudi economist Abdulwahab Abu Dahesh said.

'Gulf investors are less optimistic about the future despite a huge oil windfall. They are uncertain about the extent to which the troubles of the global economy will affect domestic economies,' Abu Dahesh said.

After making a remarkable comeback last year from a two-year correction, the Saudi and Dubai markets have been leading the way down this year.

The two markets have so far lost 25 per cent each this year, followed by Abu Dhabi Securities Exchange which has shed 8.4pc. Bahrain and Oman markets have dropped 5.1pc and 2pc, respectively.

Only the Kuwait and Doha bourses remain in the black. Kuwait is up 7.6pc but has been on the decline since July, while Doha is just 2pc ahead of its last year close.

Kuwaiti economist Jassem Al Saadun, head of Al-Shall Economic Consultants, said he believes that although Gulf states are linked, each stock market has its own dynamics.

'In the UAE, there is a general feeling that the country has been growing at a very fast pace for a long period and that the growth in the prices of assets was somewhat inflated,' Al Saadun said.

'The feeling that real estate prices could fall is now haunting the bourse, which has become very sensitive to this issue. This leads to instability and concern.'

Real estate companies are market leaders in the UAE and have tremendous influence on stock movements.