Saudi Arabia’s benchmark stock index gained the most in three weeks after crude oil climbed above $80 a barrel and global markets advanced yesterday amid optimism European leaders will curb the region’s debt crisis.
Saudi Basic Industries Corp., the world’s biggest petrochemicals maker, increased the most since March. Methanol Chemicals Co. soared 5.3 percent after the producer of methanol derivatives posted a profit in the third quarter. The 148-company Tadawul All Share Index advanced 1.4 percent, the biggest gain since Sept. 17, to 6,084.55 at the 3:30 p.m. close in Riyadh.
Oil rose in New York yesterday, capping the biggest weekly gain in seven months, as larger-than-forecast U.S. jobs growth eased concern that the economy is slowing. Crude oil for November delivery surged 4.8 percent in the week to $82.98 a barrel. Saudi Arabia, holder of one-fifth of the world’s proven oil reserves, depends on oil for 86 percent of its revenue.
“Oil back above the $80 level and the good bounce U.S. markets had in the last two days due to European optimism about recapitalizing the banks” is pushing markets higher, said Samer Darwiche, a financial analyst at Gulfmena Investments in Dubai. “The Tadawul is catching up.”
U.S. stocks rose last week, driving the Standard & Poor’s 500 Index up from the threshold of a bear market, amid European optimism and after U.S. economic data improved. The S&P 500 advanced 2.1 percent, breaking a two-week losing streak. The European Central Bank said it will bring back yearlong loans, giving banks access to unlimited cash through January 2013. The ECB will also resume purchases of covered bonds to encourage lending and the Bank of England announced its biggest stimulus since the depths of the recession.
Sabic climbed 2.9 percent, the most since March 20, to 90.25 riyals.
Methanol Chemicals posted the biggest gain since March 12, soaring to 11.85 riyals. The company also known as Chemanol posted a 26.7 million-riyal ($7.1 million) profit in the third quarter after a loss in the year-earlier period.
Saudi Arabia’s stock exchange is the only Gulf Arab bourse open on Saturdays.