By Nikhil Lohade

DUBAI--Donald Trump's surprise victory in the U.S. presidential election has roiled the global markets, but some investors in the Middle East are already betting on his transition from a divisive campaigner to a pragmatic leader.

Stock markets in the Persian Gulf opened sharply lower Wednesday amid a global risk selloff on uncertainty about Mr. Trump's policies and their potential economic impact. His stance on Muslims and immigrants added to the worries in the wider Middle East region.

But Saudi Arabia and Egypt led a markets recovery in the afternoon with the kingdom's benchmark Tadawul stocks gauge ending 0.8% higher and Cairo'smain equity index rising 1.3%. Other Gulf stock markets also pared early-session losses.

"The expectations are that Trump as president will be far more pragmatic than the campaigner," said Adel Abdel Ghafar, a visiting fellow at Brookings Doha Center. "Besides, he will be advised by a battery of Republican advisors who are unlikely to let him fully carry out any of his crazy threats."

Hillary Clinton's leadership was largely seen as a continuation of President Barack Obama's foreign policies, which didn't have many supporters in the region for several reasons, including the Arab Spring uprisings and Syria. Mr. Trump's tough views on terrorism, Iran and human rights had more takers but regional leaders largely chose to remain quiet given his comments on Muslims.

Several leaders from the region, from Saudi Arabia's King Salman to Egypt's strongman president, Abdel Fattah Al Sisi, welcomed Mr. Trump's election as president on Wednesday.Still, concerns remain.

Investment bank Exotix Partners said there is enough reason for caution about a Trump presidency, as global uncertainty increases and economic and foreign policy becomes less predictable.

The region also has its own social and economic problems to deal with. Saudi Arabia and Egypt, for instance, have both embarked on a tough path of reforms to reshape their economies.

Local factors will be more important in driving the regional markets next year, according to Cairo-based EFG Hermes. "Correlated markets like Dubai will be more vulnerable, but Saudi Arabia and Egypt are due for a pull back after strong recent gains," said Simon Kitchen, a Middle East and North Africa strategist at EFG.

"In the medium term, the OPEC meeting and the U.S. Fed decision on interest rates will be in focus," Mr. Kitchen added.

Write to Nikhil Lohade at

(END) Dow Jones Newswires

November 09, 2016 08:35 ET(13:35 GMT)

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