DUBAI, Dec 1 (Reuters) - Stock markets in Saudi Arabia and Qatar rose sharply in early trade on Thursday, led by petrochemicals on news of OPEC’s first agreement on oil output cuts since 2008 to prop up prices.
Expectations for the agreement had already boosted oil prices and Gulf bourses in late trade on Wednesday, but the deal included bigger production cuts than many analysts had expected, so oil prices continued rising on Thursday morning. Brent crude hit a six-week high of $52.73 a barrel before falling back slightly.
The Saudi stock index gained 1.5 percent to 7,103 points in heavy trade during the first half-hour. It is technically very bullish after confirming on Wednesday a break of major technical resistance on its April peak of 6,876 points; that triggered a double bottom formed by this year’s lows and pointing up to around 8,400 points in the long term.
The petrochemical index, most directly sensitive to oil prices, jumped 3.8 percent and five petrochemical producers were among the 10 most heavily traded stocks.
But the market’s gains were broad-based with 161 stocks rising and only three falling. Riyadh accepted particularly big cuts to its production in the OPEC deal, but while that could hurt headline Saudi gross domestic product growth in coming quarters, higher oil prices may increase overall Saudi state revenues, helping the government ease austerity policies slightly and aiding the economy.
Qatar’s stock index climbed 1.1 percent as petrochemical firm Industries Qatar added 2.9 percent and oil drilling rig provider Gulf International Services surged 5.8 percent.
Commercial Bank of Qatar, which earlier this week set out a turnaround plan under its new chief executive aimed at stemming a dismal earnings run, jumped 3.8 percent.
Stock markets in Kuwait, Oman and Bahrain also rose, though by smaller margins. United Arab Emirates stock markets are closed on Thursday for a public holiday. (Reporting by Andrew Torchia; Editing by Andrew Heavens)