Most Middle East stock markets rose but closed well off their intra-day highs on Sunday and some edged lower as investors started selling into the region’s rally, indicating sentiment was still shaky even after oil prices rebounded.
Saudi Arabia’s main Tadawul All-Share Index, which surged as much as 4.6% early in the day, closed just 1.1% higher at 7,690 points. That left the index up 11% from a 29-month low hit last Monday, but still 15% below its level at the end of last month, Reuters reported.
The petrochemical sector, up 3.2%, was the main support on Sunday after Brent oil climbed above $50 per barrel on Friday. The sector’s margins are directly affected by oil prices and leading petrochemical producer Saudi Basic Industries Corp. surged 4%.
But some stocks went into the red late in the session, such as Al-Tayyar Travel, which tumbled 5.8%, and Banque Saudi Fransi, down 2.5%.
Shakeel Sarwar, head of asset management at Securities & Investment Co. in Bahrain, said markets in the region were likely to remain jittery until oil prices stabilized.
“Right now I think the situation is so fluid, it becomes extremely difficult to build a solid investment case,” he said.
Trading volumes in Riyadh fell for a third session in a row, another indication that the recovery was fragile. With low oil prices pushing state finances deep into the red, the Saudi government has not yet released a detailed plan for how the world’s top oil exporter would handle an era of cheap oil that could last for years.
Elsewhere in the region, Dubai’s stock index closed 1.1% higher at 3,690 points after jumping as much as 3.2% in early trade.
