The Tadawul All-Share Index (TASI) closed 0.6 percent or 37.27 points higher at 6,252.95 on Saturday, the highest intraday level since Aug. 6. The Saudi market reopened Saturday after a week-long Eid Al-Adha holiday.

Over SR4.5 billion worth of shares changed hands.

Commenting on Tadawul’s surge, Basil Al-Ghalayini, chairman of BMG Financial Group, said: “The uncertainties in the euro zone financial markets have made investors more bullish on stable regional markets such as the Saudi stock market, with the Kingdom being the strongest economy in the region.”

However, Jarmo T. Kotilaine, chief economist at the National Commercial Bank, said: “The market reaction mirrors the positive response elsewhere in the world to the new governments in Greece and Italy. The performance of Tadawul was particularly strong in the areas of banks and petrochemicals, a fairly predictable response given that the latest steps reduce worries about oil demand erosion and discontinuous shocks to the banking system. Nonetheless, it is important to bear in mind that the fundamental elements of the European crisis remain in place and will defy quick solutions. The recent pattern of recurrent volatility hence remains the likeliest scenario.”

Global equity markets rose and the euro strengthened against the US dollar on Friday after Italy's Senate approved economic reforms aimed at restoring investor confidence and clearing the way for a new government, Reuters news agency said.

In Saudi Arabia, shares of petrochemical makers supported the market rally as all shares were in positive territory. Saudi Basic Industries Corp. gained 0.52 percent to SR96.50. Sahara Petrochemical shares surged 3.25 percent to SR20.65.