Saudi Arabia’s stock market extended gains for a third session on Sunday on buoyant earnings and upbeat non-oil business activity, while the Egyptian bourse fell further on profit taking.

The benchmark index in Saudi Arabia gained 1.3%, buoyed by a 1.9% rise in Al Rajhi Bank and a 0.8% increase in Retal Urban Development Co.

The kingdom’s non-oil business sector activity soared to its highest level in eight years in February, a survey showed on Sunday, based on a strong increase in demand and an optimistic economic outlook.

According to Ahmed Negm, Head of Market Research MENA at XS.com, the favourable business conditions in non-oil sectors could help companies maintain their profit levels despite monetary policy tightening and eroding global conditions.

“However, the developments in oil markets could still have an uncertain impact on Saudi stocks due to the current volatility.”

Oil prices - a key catalyst for the Gulf’s financial markets - gained by more than $1 per barrel on Friday and ended the week higher, driven by renewed optimism around demand from top oil importer China.

Leejam Sports advanced 2.6% following a sharp rise in annual profit.

Outside the Gulf, Egypt’s blue-chip index eased 0.1%, extending losses on profit-taking after the market hit a high in February.

Expectations of tighter monetary policy in the US and Europe could exacerbate this trend further as investors could move toward safer assets in other markets, said Ahmed Negm.

Most Gulf stocks extend rebound; Dubai falls on oil, rate hike worries

However, the index’s losses were limited by a 7.7% surge in Telecom Egypt.

According to a media report, the telecom firm and Huawei Egypt inked a cooperation agreement to foster cooperation in digital transformation.