Gulf markets rebounded on Monday after a steady opening in Asia soothed nerves, with most Gulf indexes clawing back after a sell-off in the previous day inspired by Obama's bank plan. In Saudi Arabia, chemical company Saudi Basic Industries Corp (Sabic) rose 0.6 percent, lifting the region's index. “Oil has made quite a significant move downwards without much support - if it gets closer to $70, there will be an effect on the (Saudi) market because everything always comes back to petrochemicals,” said a Riyadh-based analyst who asked not to be identified. “A lot of international investors play Sabic as a proxy for a global economic recovery and if that isn't happening, then people will sell the stock.” Saudi stock benchmark Tadawul All Share Index (TASI) rose 0.22 percent to 6,315.76 points on Monday. Dubai index rose 2.8 percent to 1,614 points as Emaar Properties climbed 5.7 percent. Abu Dhabi benchmark climbed 0.3 percent to 2,608 points, rebounding from a six-week intraday low. Dubai was the standout performer, climbing 2.8 percent in its biggest gain for three weeks, while the six other Gulf Arab benchmarks added less than a percent. “The severity of yesterday's correction was a mystery and so the market is bouncing back from that,” said Ali Khan, managing director and head of brokerage at Arqaam Capital. “The declines out of Asia today are not as severe as we would have expected given the fall on US markets on Friday and that's brought a comfort factor to our region.” On Thursday, US President Barack Obama announced plans to curb US banks' proprietary trading, sending stock markets across the globe lower and adding to rising jitters over the health of the world economy. Oman index climbed 0.6 percent to 6,406 points. Kuwait index rose 0.9 percent to 7,084 points, its highest close since Dec. 27 and biggest gain for three weeks. Qatar measure climbed 0.7 percent to 6,710 points. Bahrain index rose 0.2 percent to 1,474 points. “Obama's plan is likely to impact the major US banks and the whole global financial sector, while the Gulf could follow suit and introduce similar rules,” said Shailendra Singh, investment manager at Al-Shurooq Securities in Muscat. “In the long-term, Obama's move will be positive for investors - banks would focus on their core business and there would be more stability in the market.” In the short-term, most analysts remain cautious, forecasting more range-bound trading on regional bourses, while Dubai Holding's spat with Standard & Poors will do little to boost confidence in UAE stocks.
