Saudi Arabian shares rose for the first time in 11 days, snapping the longest losing streak in 20 months, as regional tensions eased and investors speculated the holiday shopping season in the U.S. will boost the economy.
Etihad Etisalat Co. (EEC), the second-largest telecommunications operator in Saudi Arabia also known as Mobily, had the biggest gain in almost three weeks, and Samba Financial Group (SAMBA), the kingdom’s second-biggest lender, jumped to a one-week high.
The Tadawul All Share Index (SASEIDX) gained 0.8 percent, the biggest advance since Nov. 6, to 6,665.49 at the 3:30 p.m. close time in Riyadh. The gauge fell 4.8 percent in the previous 10 days to a four-month low. The benchmark index’s relative strength index closed at 29 on Nov. 21. A reading below 30 signals an asset will rebound, according to some technical analysts. The Arab world’s biggest bourse has gained 3.9 percent this year.
“The market was beaten down in the past two weeks which suggests that most negative news has been priced-in and now we are seeing some recovery in stock prices,” Asim Bukhtiar, senior analyst at Riyad Capital, said in an e-mail. “Easing regional tension may be contributing factor but investors are also looking ahead to holiday shopping season in the U.S., which could raise domestic optimism.”
Egypt and the U.S. brokered a cease-fire between Israel and Hamas that ended eight days of air strikes and missile firing. It was announced late on Nov. 21 and has largely held, though both sides said there were breaches yesterday.
U.S. stocks capped their biggest weekly rally since June on the last day of trading this week as the American holiday shopping season began. The Standard & Poor’s 500 Index climbed 1.3 percent on Nov. 23, the best post-Thanksgiving performance since 2007, extending the week’s rally to 3.6 percent as President Barack Obama expressed confidence on a budget agreement with Congress and data from China to Germany bolstered optimism about global growth.
Concern that Obama’s re-election set up a budget showdown with the Republican-controlled House of Representatives sent the S&P 500 down 7.7 percent from its 2012 high in September through Nov. 15. Federal Reserve Chairman Ben S. Bernanke said on Nov. 20 that the central bank doesn’t have the tools to offset the potential harm to the economy from the fiscal cliff.
Mobily increased 1.4 percent to 72.75 riyals. Samba rose 1.6 percent to 44.70 riyals, the highest level since Nov. 18.
Saudi Arabia’s stock exchange is the only Persian gulf bourse operating Saturdays.
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