Saudi stocks rise in kingdom's pre-budget rally
The main Saudi index was up 3.0 percent in early trade, adding to Thursday's 8.9 percent leap
Saudi Arabia's stock market rose sharply on Sunday in anticipation that the kingdom's 2015 state budget, expected to be released as soon as Monday, will sustain heavy spending on economic development projects despite the drop in oil prices.
The main Saudi index was up 3.0 percent in early trade, adding to Thursday's 8.9 percent leap. Real estate developer Dar Al Arkan, which could benefit from government efforts to resolve the country's housing shortage, was the most heavily traded stock, gaining 4.9 percent.
Other big gainers included miner Ma'aden, up 4.7 percent, and petrochemical producer Saudi Kayan, up 5.9 percent.
The Saudi market plunged earlier this month on fears that the government might cut spending as oil prices dropped. But Finance Minister Ibrahim Alassaf ignited a rally when he said on Wednesday that his government would continue spending strongly on development projects and social benefits in the 2015 budget.
However, the Saudi market came off its early highs on Sunday morning, after rising 5.0 percent at one stage.
Although Brent crude oil rebounded above $60 a barrel at the end of last week, oil traders are not sure that a floor has been established, and any renewed slide by the price towards $50 would hurt sentiment in Gulf bourses.
All Gulf stock markets were higher in early trade on Sunday, with Dubai climbing 9.8 percent, adding to Thursday's 13.0 percent leap. Qatar, which missed Thursday's rebound because it was closed for a national holiday, was up 8.5 percent on Sunday.
Egypt's stock market rose 3.9 percent. At the weekend, Fitch Ratings upgraded Egypt's debt to B, citing government policies to cut debt and stimulate growth.