After global stocks rallied on the last day of the week on Friday, the Saudi stock market jumped nearly two percent yesterday on optimism that an accord among European leaders on banks will help contain the region's debt crisis.
The Tadawul All-Share Index (TASI) while reflecting a large intra-day spike at 6,730.33 points earlier added 124.28 points or 1.89 percent to close the day in the green territory at 6,709.91 points.
"The bounce in the TASI today (Saturday) was primarily in response to the euro zone summit. The summit went further than most analysts had expected in tackling the economic problems in the region," Paul Gamble, chief economist and head of research at Jadwa Investment, said.
"Global markets responded positively on Friday and oil prices jumped. In addition, the deal for National Shipping Company of Saudi Arabia (Bahri) to buy Saudi Aramco unit Vela, was another positive factor for the market," Gamble added.
Commenting on Tadawul's performance after the European deal yesterday, Jarmo T. Kotilaine, chief economist at the National Commercial Bank, said: "Of course, the European deal is significant. It is a major attempt to control the crisis and further delay some of the painful decisions. This is one of those days when the global economic outlook has improved. The longer term outlook is another, much less certain matter."
The index traded in the range of 145 points, wavering in the upward district throughout the day. On YTD basis it has regained a growth of 4.55 percent.
Micro Cap remained prominent among the market cap indices, recovering more than 2.5 percent.
All Saudi sectors performed well, the GulfBase said in its market commentary. Only Hotel & Tourism sector resisted the prevailing upward trend, but became green just before ending the session, achieving less than one point for the day.
Media and Publishing sector advanced 4.51 percent over the day, posting the biggest gains among all sectors, followed by Insurance and Transport sectors, which showed an increment of 3.3 percent and 3.1 percent respectively.
Market breadth was largely positive, as out of 154 stocks traded yesterday only 13 were able to close lower.
Farouk Miah, head of equity research at NCB Capital, said: "Positive developments in Europe are increasing hopes that the worst is behind us for the European debt situation. This led to oil futures to increase by 9 percent on Friday - this is the most direct link to the Tadawul and probably the main reason the TASI reacted strongly today (Saturday)."
The bellwether SABIC (Saudi Basic Industries Corp.) played well among heavy weights, surging 3.5 percent to SR 92.75. Al-Rajhi Bank and Samba Financial Group followed it, increasing by 2.79 percent and 2.50 percent respectively.
Share trading activity remained low yesterday with volume of 232 million shares. The market's volume went 37.1 percent below the 50-day average of 369.07 million shares.
Liquidity also shrank to SR 5.2 billion, 28.2 percent lower than the 50-day average of SR7.3 billion.
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