Saudi Arabia’s stocks outperformed Gulf peers on Tuesday after China announced it would further ease its COVID-19 curbs, bolstering expectations of a demand recovery in the world’s second-largest economy.

China will stop requiring inbound travellers to go into quarantine starting from Jan. 8, the National Health Commission said on Monday. Management of COVID-19 will also be downgraded to a less strict category, the health authority said, as the disease has become less virulent and will gradually evolve into a common respiratory infection.

China is the last major country to move toward treating COVID as endemic. Its containment measures had slowed the $17 trillion economy to its lowest growth rate in nearly half a century, disrupting global supply chains and trade.

Saudi Arabia’s benchmark index gained 1.3%, led by a 1.8% rise in Al Rajhi Bank and a 1.9% increase in oil giant Saudi Aramco.

Oil, a key catalyst for the Gulf’s financial markets, hit a three-week high as China’s latest easing of COVID restrictions spurred hopes of a fuel demand recovery, with further support coming from cuts to U.S. energy production caused by winter storms.

The Saudi stock market rose today while oil markets’ prospects improved with China opening up, said Fadi Reyad, chief market analyst at CAPEX.com.

“However, the main index remains near its lowest levels this year and could be at risk of other price corrections.”

Dubai’s main share index gained 0.6%, with top lender Emirates NBD.

In Qatar, the index fell 0.2%, extending losses for a third session.

Saudi ends higher on oil prices; most Gulf markets in red

According to Reyad, the Qatari index continued to decline under the weight of the natural gas market’s performance.

Outside the Gulf, Egypt’s blue-chip index closed 0.5% lower, hit by a 1.8% fall in Commercial International Bank.

Egypt’s central bank said on Monday it is taking all necessary actions to regulate the foreign exchange market and achieve monetary stability in the near future.

======================================== SAUDI ARABIA    rose 1.3% to 10,359 ABU DHABI       was flat at 10,359 DUBAI           down 0.6% to 3,348 QATAR           dropped 0.2% to 10,764 EGYPT           lost 0.5% to 14,485 BAHRAIN         advanced 1% to 1,877 OMAN            rose 0.3% to 4,845 KUWAIT          was up 0.9% to 8,097========================================