The Saudi Stock Exchange outperformed its peers in the Gulf region today, Tuesday, after China announced further easing of restrictions related to Covid-19, which boosted expectations of a recovery in demand in the second largest economy in the world.
Yesterday, Monday, the National Health Committee said that China will exempt those coming to it from quarantine procedures, starting from January 8. She added that China will also reduce its level of dealing with the pandemic to a less strict level, as the disease has become less virulent and will gradually turn into a normal respiratory disease.
China is the latest major country to move towards treating Covid as an endemic disease. The measures it took to contain the virus caused the $17 trillion economy to slow to its lowest growth rate in nearly half a century, disrupting global supply and trade chains.
The Saudi stock market index rose 1.3%, led by Al-Rajhi Bank, which gained 1.8%, and Saudi Aramco, which increased 1.9%.
Oil, a major catalyst for Gulf financial markets, hit a three-week high as China’s latest measure to ease Covid restrictions revived hopes for a recovery in fuel demand, while cuts in energy production in the United States as a result of winter storms further supported prices.
Fadi Riyadh, senior market analyst at Capix.com, said that the Saudi stock market index rose today, while the prospects for oil markets improved with the easing of Chinese restrictions.
“However, the main index is still near its lowest levels this year, and it may be exposed to other price correction waves,” he added.
And the main index of the Dubai Stock Exchange increased 0.6%.
The Qatari index fell 0.2%, extending its losses for the third consecutive session.
Riyad said that the Qatari index continues to decline affected by the performance of natural gas markets.
Outside the Gulf region, the index of the leading stocks on the Egyptian Stock Exchange closed down 0.5%, under the weight of the 1.8% drop in the share of the Commercial International Bank.
Yesterday, Monday, the Central Bank of Egypt said that it will take all necessary measures to regulate the foreign exchange market and achieve monetary stability in the near future.