Major stock markets in the Middle East rebounded on Sunday, joining the global market rally at the end of last week as investors took solace in the bounce-back in crude oil prices. Brent surged 10 percent to $32.18 a barrel on Friday, as bearish traders who had taken out record short positions scrambled to close them.
The benchmark S&P 500 US equity index rallied 2 percent and registered its first positive week of 2016 and the MSCI All Country World Index rose 2.7 percent.
Saudi Arabia's index rebounded 2.7 percent to 5,612 points, but is 222 points off its session high. The rally lost some steam in later trade as investors turned a quick profit and cashed out, proving they lacked conviction that equities have turned a corner.
"This is a typical oil tracking rally," said Santhosh Balakrishnan, senior research analyst at Riyad Capital. Markets are still in a wait-and-see phase, and a firm comeback will only transpire once crude prices stabilise, he added.
The majority of petrochemical stocks, which have been battered by weakness in oil prices since the start of the year, recovered and the sub-sector index climbed 2.6 percent. Saudi Basic Industries (SABIC), the largest petrochemical firm, traded up 3.2 percent to 63.92 riyals ($17.04) after touching a high of 67.25 riyals per share.
Earnings season has officially ended in Saudi Arabia, but some companies reported late on Thursday, before the rallies in oil and global stock markets.
Al Rajhi Bank jumped 5.9 percent. The Islamic lender reported a 28.2 percent rise in its fourth-quarter net profit on Thursday. It made 1.95 billion riyals ($519.6 million) compared with analysts' forecasts of 1.67 billion riyals.
The banking sector's total net income increased 3.8 percent year-on-year to 10 billion riyals while loans grew 8.2 percent over the same period, said a note by Saudi-based NCB Capital.
"We believe that the increase in the bottom lines was primarily driven by higher operating income," the note said.
Shares in Etihad Etisalat (Mobily) surged the daily limit of 10 percent after the company swung to profit in fourth quarter of 2015. Mobily made a net profit of 11 million riyals ($2.93 million), compared with a loss of 2.11 billion riyals a year earlier.
Zain Saudi, another telecom operator, traded up 1.7 percent to 6.01 riyals, off an intra-day high of 6.30 riyals. The company made a net loss of 291 million riyals in the fourth quarter. Two analysts forecasted that the telecom operator would make a loss of 247 million riyals and 232.7 million riyals, respectively.
Dubai's index rebounded 5.2 percent to 2,757 points, pulling away from a 28-month low on Thursday. The majority of shares jumped more than 2 percent in the largest volume of trades this year.
Arabtec rocketed 10.0 percent, trimming its year- to-date losses to 3.2 percent. Emaar Properties also enjoyed an 8 percent surge.
Abu Dhabi's benchmark jumped 4.3 percent to 3,839 points from a 28-month low on Thursday, trimming its losses to 10.9 percent this year.
Dana Gas, the most traded stock on the bourse, advanced 5 percent.
Blue-chip lenders National Bank of Abu Dhabi and First Gulf Bank, which will start reporting earnings from the end of this week, traded up 3.9 and 4.5 percent respectively.
Small and mid-cap stocks - which are usually thinly traded - topped gainers. Emirates Driving, and Ras Al Khaimah Cement soared 14.3 and 11.7 percent respectively. In Qatar, the exchange jumped 4.6 percent as the majority of shares surged more than 3 percent.
Oil-linked companies, Qatar Gas Transport and Gulf International Services jumped 5.3 and 9.9 percent respectively.
In Cairo, the main index traded up 3.2 percent, bouncing back from a 28-month low close on Thursday.
Non-Egyptian Arab traders were net buyers, bourse data showed, while foreign managers and Egyptians were net sellers.
Juhayna Food Industries, jumped 6.6 percent after the company reported a good set of fourth quarter results.
"The food producer showed a very strong recovery in the gross profit margin from a year earlier," said a note by NBK Capital. "We have been expecting 2015 to be a turnaround year for Juhayna with easing raw material costs playing a major factor in this."
Orascom Telecom and Pioneers Holding, some of the stocks favoured by regional investors, advanced 5.7 and 6.8 percent, respectively.
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