(Reuters) – Saudi Arabian shares surged on Monday as crude prices rose to their highest in just over a year, while the markets in the United Arab Emirates finished lower after a spike in coronavirus cases in recent weeks soured sentiment.
Oil prices, the most crucial catalyst for the Saudi financial market, were boosted by supply cuts among key producers and hopes for further U.S. economic stimulus measures that could boost demand. [O/R]
The oil market continues to tighten with deeper cuts from Saudi Arabia, which pledged extra reductions in February and March after cuts by other members of the Organization of the Petroleum Exporting Countries and its allies.
Saudi Arabia’s benchmark index firmed 1.4%, extending its gains to a third session and posting its best day since Dec. 22.
Index heavyweight Al-Rajhi Bank added 2.1%, while Saudi Basic Industries Corp, the Gulf’s largest petrochemical maker, advanced 1.6%.
However it was a different story in other Gulf markets, with Abu Dhabi and Dubai shares declining 0.3% and 0.9% respectively.
The UAE on Sunday decided it will temporarily only vaccinate residents and citizens who are elderly or who have certain health conditions.
The policy change was brought in to contain the disease and to ensure acquired community immunity following a spike in infections over the past weeks, the country’s health ministry said.
In Dubai, losses were led by the emirate’s biggest bank Emirates NBD and its largest listed developer Emaar Properties, which shed 2.2% and 1% respectively.
The Dubai markets have now logged losses in the last four straight sessions.
Aldar Properties was the biggest loser on the Abu Dhabi benchmark, falling 3.1%, while the UAE’s largest lender and index heavyweight First Abu Dhabi Bank slipped 0.3%.
In Qatar the benchmark declined 0.5%, dragged down mainly by a 1.5% loss in the Gulf’s biggest lender Qatar National Bank.
Outside the Gulf, Egypt’s blue-chip index lost 0.7%, with Commercial International Bank, the country’s largest private bank, falling 1.2%.
Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Jan Harvey