25/09/2010 00:00 AST
Gulf stock markets scored fresh gains this week, buoyed by reports that the US economy was slowly recovering and by stable demand for oil that has kept crude prices at around $75 a barrel over the past couple of weeks, financial analysts said Friday.
They pointed out that the nearing closure of the third quarter would also give impetus to markets mainly through window dressing moves that seek to improve the quarterly performance of financial services firms.
Saudi stocks rallied for the fourth week in a row, led by the petrochemical and banking sectors, as investors awaited the release of third quarter earnings.
The Saudi stock benchmark Tadawul All Share Index (TASI) gained 1.25 percent on a weekly basis to cross the 6,400-point psychological barrier and close at 6,434.90 points.
“It is quite clear that the Saudi market is still sluggish due to liquidity shortage and lack of professionalism in administering dangers,” said Abdullah Baeshen, board chairman of the Riyadh-based TeamOne Consulting.
He said that banks in Saudi Arabia and other Arab countries still had reservations on lending ‘despite strong fundamentals’ enjoyed by Saudi Arabia, the world’s largest exporter of oil.
“Despite profit-taking moves, Arab markets responded positively to reports that the US economy had surpassed recession in June 2009 and that it was well on its way to recovery,’ Nizar Taher, head of brokerage at the Jordan Ahli Bank, told the German Press Agency DPA.
“I believe investors will be awaiting the third quarter results in the coming weeks, though the major factor affecting the direction of regional markets will be the restoration of confidence and getting rid of fears,” he said.
Taher said that the liquidity crunch and hesitation on the part of investment funds would remain an obstacle that impedes advancement of regional bourses.
Meanwhile, buoyant US industrial figures helped shore up sentiment in the markets, sending stocks higher Friday while the impact of the Bank of Japan’s latest apparent intervention to weaken the yen proved short-lived.
In Europe, the FTSE 100 index of leading British shares was up 41.49 points, or 0.8 percent, to 5,588.57 while Germany’s DAX rose 98.49 points, or 1.6 percent, to 6,238.20.
The CAC-40 in France was 49.66 points, or 1.3 percent, higher at 3,760.27.
In the US, the Dow Jones industrial average was up 172.52 points, or 1.6 percent, at 10,834.94 soon after the open while the broader Standard and amp; Poor’s 500 index rose 19.88 points, or 1.8 percent, to 1,144.71.
European markets and Wall Street futures had been trading lower, but upbeat US durables goods data prompted the recovery.
Saudi Gazette
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