Saudi shares rally on strong petchem index


01/07/2012 08:17 AST  Saudi Gazette

Saudi shares closed higher on Saturday, led by gains in the petrochemical and banking stocks.

The stock benchmark Tadawul All Share Index gained 1.89 percent to 6,709.91 points and the petrochemical index added 2.5 percent to 5,929 points.

Shares in Saudi Basic Industries (Sabic) gained 4 percent. The banking index added 2 percent to 15,321 points.

Shares at Saudi National Shipping Co. (Bahri) rose 4.5 percent after it signed an agreement with Saudi Aramco to buy its Vela marine unit for $1.3 billion in cash shares.

Oil soared the most in more than three years Friday after European leaders took surprisingly aggressive steps meant to halt a debt crisis that has undermined the regional economy.

Benchmark US crude jumped by $7.27, or 9.4 percent to end the week at $84.96 per barrel in New York. Brent crude, which helps set the price of imported oil, rose by $6.44, or 7 percent, to $95.51 per barrel in London.

Oil rose after eurozone leaders unveiled a plan to rescue ailing banks, relieve debt-burdened governments in Italy, Spain and elsewhere and restore the confidence of markets. "The Saudi market was supported by positive news from the European summit," Turki Fadaak, the head of research at Albilad Investment Co. in Riyadh, said Saturday. "This led to a strong rise in oil and commodity prices."

Global stocks rallied, with the S&P 500 surging 2.5 percent for its biggest advance of the year, as euro-area leaders agreed to relax conditions on emergency loans for Spanish banks and possible help for Italy.

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