Saudi Basic Industries Corp. (SABIC) climbed 2.2 percent and Rabigh Refining and Petrochemical Co. rose 2.3 percent.
The Tadawul All-Share Index (TASI) climbed 0.6 percent to 6,436.64 on Tuesday. The sector activity for the day was mostly negative with 6 out of 15 closing with gains ranging from 0.15 percent by the Transport sector to 2.13 percent by the Petrochemical Industries sector. On the other hand the losing sectors ranged from 0.03 percent by the Cement sector and the Real Estate Development sector to 0.59 percent by the Telecommunication & Information Technology sector. The overall market breadth for the day was positive with 61 advancers against 47 decliners giving it an AD ratio of 1.29, the Financial Transaction House (FTH) said in its daily market commentary. The stock market turnover reached SR3.44 billion.
"Saudi investors prefer petrochemicals because they want to get exposure to a commodity price recovery that's driven by hedges against a dollar decline," said Hesham Tuffaha, Bakheet Investment Group head of research.
This play has pushed petrochemical prices up by an average of 7 to 8 percent in October and November, Tuffaha said, boosting producers' earnings in the fourth quarter.
Saudi Arabia's banking index sank to a six-month low.
"Bank stocks have been a disaster — it could be that people are switching from banks to petrochemicals, while bank volumes are really low so when investors sell, stock prices tend to fall sharply," said a Riyadh-based trader who asked not to be identified.
"But people are also worried the central bank will again ask banks to take more provisions in Q4, like it did in Q3."
Qatar's index rose 1.1 percent to 8,625 points — a new 26-month high as a World Cup rally extended into a third day. It is up 5.4 percent since the country was chosen to host the 2022 event.
Dubai's Arabtec climbed 4.4 percent to a month-high and Drake & Scull rose 2.9 percent to a 13-month peak. Traders have bet this pair will win contracts from Qatar's expected World Cup infrastructure spending.
These two firms accounted for more than half of all shares traded on Dubai's index, while Arabtec has gained 14 percent in two sessions this week.
"People are very optimistic that companies like Arabtec and Drake & Scull will win new contracts in Qatar and that's why they're seeing so much volume," said Mohamed Khaled, Prime Emirates relationship manager.
The Dubai index rose 0.6 percent to 1,717 points.
The Abu Dhabi index fell 0.3 percent to 2,740 points.
— With input from agencies
