Saudi- Gulf stocks rebound after several weeks of heavy selling

(MENAFN- Arab News) DUBAI: Major Gulf stock markets rose sharply on Thursday suggesting they had established short-term floors after several weeks of heavy selling but their long-term outlook remained murky because of unstable oil prices.
The Saudi Arabian Tadawul All-Share Index climbed 3.0 percent to 7604 points.
Shares in petrochemical firms their profit margins closely linked to oil prices surged as Brent crude rose nearly 4 percent to almost $45 a barrel. The petrochemical sector index jumped 5.3 percent as the biggest company Saudi Basic Industries Corp. gained 4.8 percent.
The Saudi market's slide this month brought down valuations which many funds had considered excessive; at this week's low the market's forward price-to-earnings ratio was down to about 12 times reasonable by historical standards.
Several market indicators on Thursday suggested investor confidence remained fragile. Stock trading turnover fell even as stock prices rose while dollar/riyal forwards and Saudi credit default swaps used to hedge against the risk of a currency devaluation or a sovereign debt default stayed unusually high.
Dubai's stock index surged 4.0 percent to 3648 points leaving it up 13 percent from this month's low hit on Monday but 12 percent below its end-July level.
Property stocks sensitive to interest rates were particularly strong after New York Federal Reserve President William Dudley said on Wednesday that the prospect of a September interest rate hike in the United States "seems less compelling" because of unstable global markets. Emaar Properties gained 4.8 percent.
Some volatile stocks favored by local retail investors soared with Amlak Finance jumping 9.1 percent.
Port operator DP World also fared well surging 8.7 percent after it posted interim earnings. It reported a 22 percent rise in first-half net profit to $405 million partly because of gains from an acquisition; analysts had predicted a mean $400 million Thomson Reuters data showed.
Abu Dhabi's market rose 3.0 percent as Aldar Properties surged 6.9 percent.
Qatar was up 3.1 percent as Gulf International Services the most heavily traded stock added 5.5 percent. The drilling rig provider's earnings are closely correlated with the oil industry.
Outside the Gulf Egypt's market closed 3.0 percent higher as equity market sentiment around the world improved. Beaten-down property developer Emaar Misr soared 10.3 percent.
Pioneers Holding jumped 10.0 percent after posting a second-quarter net profit of 321.9 million Egyptian pounds ($41.14 million) up from 96 million a year earlier on strong revenue growth at its subsidiaries.