Tadawul rises 1.5% on petchem gains

Saudi shares close higher on Saturday, lifted by gains in the petrochemical sector after oil prices rose on Friday. The Tadawul all-share Iindex added 1.5 percent to 6,768 points, the biggest increase since July 3. The index has advanced 5.5 percent this year The petrochemical index added 3 percent to 5,905 points. Saudi Basic Industries gained 4 percent. “It is I think hard to read too much into these numbers. There is an obvious connection between the oil price and the petrochemicals heavyweights. A price gain for oil therefore tends to boost a big part of the index,” said Jarmo T. Kotilaine, chief economist at the National Commercial Bank. “However, the economic backdrop remains highly uncertain and the demand erosion concerns for oil are likely to resurface with each bit of bad news from Europe and elsewhere. The scene therefore appears set for continued volatility,” he said. The banking index also closed higher yesterday, gaining 0.8 percent to 15,449 points. European and US equities gained yesterday on optimism Europe’s policy makers will take further action. The Standard & Poor’s 500 Index (SPX) increased 1.7 percent this week, the most in four weeks. European Central Bank President Mario Draghi is said to be planning talks in the coming days with Bundesbank President Jens Weidmann on stimulus measures including bond purchases. ECB and Federal Reserve policy makers are scheduled to gather next week in separate meetings.