Saudi Exchange’s benchmark Tadawul All Share Index surged above 11,000 on Sunday, headed by energy and materials stocks amid geopolitical uncertainty from ongoing tensions between US-Israel and Iran throughout the region.
The benchmark index had advanced 224.80 points, or 2.09 percent, to 11,001.12 at 12:30 p.m. Saudi time. The MSCI Tadawul Index increased 26.96 points, or 1.84 percent, to 1,488.86, while the Kingdom’s parallel market, Nomu, slipped 0.05 percent to 22,485.78.
The profits were attributed to the Gulf market responding to the increased tensions between the US-Israel alliance and Iran, and moving their investments to areas that were more resistant to the rise in oil prices and interruptions in the supply.
Saudi Aramco was among the top performers, with its share price up 4.56 percent to SR27.06 as of 12:30 p.m. Saudi time.
Speaking to Arab News, Tony Hallside, CEO of STP Partners, said, “Energy producers and oilfield services typically outperform on higher crude, while the pain concentrates in airlines, shipping, petrochemicals, and any sector with high fuel or logistics intensity.”
Century Financial chief investment officer Vijay Valecha informed Arab News that energy firms such as Saudi Aramco might witness a surge in share prices under current market conditions.
Valecha stated, “At the sector level, energy and petrochemical companies are likely to remain relatively resilient due to stronger pricing. In contrast, sectors such as real estate, consumer discretionary, banking, and capital markets would likely see short-term volatility and profit-taking as investors adopt a more cautious stance.”
He also mentioned that high energy prices would accelerate inflationary pressure globally and leave supply chains uncertain, which may strain overall economic activity.
Stock exchanges across the Gulf Cooperation Council also reported the indications of recovery on March 6, with the Bahrain Bourse settling up 0.24 percent and the Muscat Stock Exchange gaining 1.44 percent.
However, the Qatar Stock Exchange dropped by 0.15 percent. UAE equities ended on Sunday due to an official holiday. The Dubai Financial Market index slipped on March 6, in a fifth consecutive session by 3.2 percent or 197.49 points to 5,917.22. It fell 9.01 percent in the week.
The Abu Dhabi Securities Exchange general index declined in a seventh straight session and declined 1.4 percent, or 141.49 points, to 9,903.36 on March 6.
Valecha added in a separate statement, “UAE equities ended the week lower as the widening conflict involving the US, Israel, and Iran continued to weigh heavily on risk sentiment. Dubai and Abu Dhabi stocks slid further upon reopening on Wednesday, pressured by regional tensions after the two-day break.”
He said, “Banking and property stocks have been the largest drags as investors reassessed and questioned whether the market had priced in too much resilience. The shift in perception followed missile and drone attacks on Dubai over the weekend, which undermined the idea that the city remained insulated from global tensions.”
