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China eases Covid-19 restrictions, Optimism dominates Saudi Stock (Tadwal)

The Saudi Stock Exchange (Tadwal) outperformed its Gulf peers on Tuesday after China announced further relaxation of Covid-19 restrictions, raising hopes for a recovery in demand in the world’s second-largest economy.

 

According to the National Health Committee, those entering China will be exempt from quarantine procedures beginning January 8. It also stated that China will scale back its response to the pandemic as the disease has become less virulent and will gradually transform into a common respiratory disease.

 

China is the most recent major country to recognize Covid as an endemic disease. The measures taken to contain the virus caused the $17 trillion economy’s growth rate to slow to its slowest in nearly half a century. This disrupted global supply and trade chains.

 

The Saudi stock market index rose 1.3%, led by Al-Rajhi Bank’s 1.8% gain and Saudi Aramco’s 1.9% gain.

 

Oil, a major driver of Gulf financial markets, hit a three-week high as China’s latest move to ease Covid restrictions rekindled hopes for a recovery in fuel demand, while cuts in US energy production due to winter storms boosted prices even further.

 

According to Fadi Riyadh, senior market analyst at Capix.com, the Saudi stock market index rose today, while the outlook for oil markets improved with the relaxation of Chinese restrictions.

 

“However, the main index remains near its year-to-date lows, and it may be vulnerable to further price correction waves,” he added.

 

The Dubai Stock Exchange’s main index increased by 0.6%.

 

The Qatari index dropped 0.2%, extending its losses for the third session in a row.

 

According to Fadi Riyadh, the Qatari index is continuing to fall as a result of the performance of natural gas markets.

 

Outside the Gulf region, the Egyptian Stock Exchange’s leading stock index fell 0.5%, weighed down by a 1.8% drop in the shares of Commercial International Bank.

 

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