With heavy selling continues this summer as central banks around the world raise interest rates to try to combat soaring inflation. Global stock markets are expected to continue to bleed money.

According to Arab Net, CEO and head of research at financial advisory firm Rosa & Roubini, Brunello Rosa, believes that central banks will continue to tighten monetary policy while markets continue a downward spiral.

Now is the time to re-estimate the economic fundamentals around the world in terms of growth,' he said. It's hard for markets to be completely optimistic when inflation is up, growth is down, and interest rates are rising rapidly around the world.

Last Thursday, the Dow Jones Industrial Average fell more than 1,000 points while the Nasdaq Composite fell nearly 5%. That 5% drop erased all gains from a short-lived rally the day before when the US Federal Reserve announced it would raise interest rates.

This comes as the short-term rise was driven by investors' optimism that the Federal Reserve did not implement a larger interest rate increase, but this optimism quickly gave way to fears of a rise in interest rates later in the coming months.

Rosa noted that investors were initially optimistic about the news of a 75 basis point rate hike, but the fact that there is still a strong possibility of several 50 basis point increases over the coming months has investors worried.

Obviously all central banks are speaking assertively at this point, Rosa said, but the truth is that too much tightening will eventually lead to an economic downturn.

He also noted that most European governments and the United States constantly talk naively about avoiding an economic downturn.

He said: In the euro area and the United States they are not close to realizing that there will be some kind of contraction in economic activity.

Rosa expects the Russian invasion of Ukraine to last much longer than many investors expect, which will continue to fuel ongoing supply chain disruptions and inflation while adding fuel to the fire of higher interest rates.

In turn, the Stoxx 600, the broader European stock index, fell 1% on Friday morning following the heavy selling on Wall Street on Thursday. The Stoxx 600 is down more than 11% so far this year.

In Asia, the Hang Seng Index in Hong Kong decreased by 3.81% and in China, the Shanghai Composite Index decreased by 2.16%.