By Morgan Winsor -
Saudi Arabia’s stock market took a sharp upturn during morning trade Thursday despite global fears from a Chinese economic slowdown. The main Saudi stock index surged 4.5 percent in the opening minutes as petrochemical shares clawed back in response to a rebound of global oil prices, Reuters reported.
Petrochemical blue chip stocks in Saudi Basic Industries rose 5.8 percent and Ma’aden was up 6 percent. The petrochemical sector added 6.1 percent Thursday and oil prices jumped more than 4.5 percent, after reaching six-and-a-half year lows earlier this week. The heavy turnover suggested investors gained some confidence for at least the short-term, after the Saudi market jumped up 7.4 percent Tuesday.
Other Middle East indexes also rebounded. Egypt’s market saw a boost by the improved global equities backdrop and the Egyptian stock index climbed 2.9 percent during early trade Thursday, Reuters reported.
However, the fate of oil prices remains uncertain amid concerns over the Chinese economy and a global oil glut. The stock market in oil-rich Saudi Arabia lost 23 percent this month. Oil futures had tumbled for eight consecutive weeks because of huge fuel oversupply and a slowing global economy, according to the Associated Press.
Earlier this week, markets across Asia, Africa, Europe and the United States plunged amid a global sell-off, as fears escalated over a looming Chinese economic crisis. The benchmark Shanghai Composite index plummeted 8.6 percent in Monday morning trade and eventually ended the day down 8.5 percent, which wiped out all of this year’s gains and marked the steepest single-day slump in eight years. Hong Kong’s Hang Seng index tumbled nearly 4.8 percent, while the smaller Shenzhen Composite fell 7.7 percent.
The record trading day in China, dubbed “Black Monday,” was the culmination of growing concerns over China’s slowing economy and panicked investors in Asia who reacted to last week’s severe sell-off on Wall Street. The chaotic trading has hit currencies, commodities and shares around the world. The American stock market shed a whopping $2.1 trillion of value in just the last six days of market madness, CNN reported.