JEDDAH: Petrochemical and small-cap stocks turned around Saudi Arabia’s index after early declines on Monday while blue-chip companies dragged other Middle Eastern bourses lower.

The Saudi benchmark Tadawul All-Share Index swung in volatile trade, dipping below the critical 6,000 level but then gaining momentum mid-session as petrochemical and speculative stock were heavily bought, lifting the index 1.4 percent to settle at 6,177 points.

“The swing factor in the stock market were the petrochemical shares,” said a Riyadh-based trader.

“Further dips in the market will make those stocks relatively more attractive from a valuation perspective.”

Saudi Basic Industries (SABIC), the largest stock by market value, jumped 3.3 percent, helping lift the petrochemical index 3.1 percent.

Upcoming earnings will show how far petrochemical companies’ gross margins were squeezed by subdued global demand and the resumed slump in oil prices, coupled with higher operating costs following recent moves by the government to reduce subsidies.

“Petrochemical had a challenging year in 2015 and have lost their cost advantage versus international players and we expect 2016’s net income to decline,” said a note from Riyadh-based NCB Capital.

Traders also bought back speculative stocks which slumped on Sunday, triggered by margin calls. Emaar Economic City and Knowledge Economic City, mid-tier stocks, each soared more than 7.0 percent.

Yanbu Cement, a pure play on the kingdom’s construction sector, jumped 7.1 percent after releasing its fourth quarter earnings on Sunday. Net income rose 8.3 percent from a year earlier, according to a bourse filing.

“We believe the 8.3 percent year-on-year growth in net income is attributed mainly to higher sales volumes coming from a low base because 2014’s fourth quarter was hampered by the changes in the labor market and the lower demand due to the Haj season,” said a note by NCB Capital.

High inventory levels and continued demand slowdown led larger cement companies to offer sales discounts in 2015.