Dubai stocks jump over 6% in early trade

Gulf stock markets rose sharply in early trade on Sunday, continuing a rally which began on Thursday after Brent crude oil bounced back above $60 a barrel and Saudi Arabia's government said it would continue spending heavily despite cheaper oil.

Dubai's stock index was 6.9 percent higher after 10 minutes of trade, adding to Thursday's 13 percent leap. Blue chip Emaar Properties rocketed 11.1 percent.

Abu Dhabi's market gained 3.9 percent, led by real estate stocks; Aldar Properties  soared 13 percent.

Kuwait gained 1.5 percent. The market in Oman, where the economy is believed to be more vulnerable to low oil prices because of the government's constrained finances, edged up 0.8 percent.  

Qatar's stock index jumped 9.0 percent in early trade on Sunday.

Vodafone Qatar climbed its 10 percent daily limit in the opening minutes, as did Barwa Real Estate.

Qatar's market was closed for a national holiday on Thursday so it missed out on the start of the Gulf's rally, when stocks were buoyed by the rebound of Brent crude oil above $60 a barrel.

Also, Saudi Arabian Finance Minister Ibrahim Alassaf said on Wednesday that his government would continue spending strongly on development projects and social benefits in its 2015 budget, which is expected to be announced on Monday.

This helped to reassure investors that lower oil prices would not mean any big cutbacks in spending by big Gulf governments, which have huge fiscal reserves that they can use to cover any budget deficits.

Another positive for Qatar was that while Fifa's executive committee unanimously agreed on Friday to publish an "appropriate" version of the investigation into the bidding process for the 2018 and 2022 World Cups, it insisted that Russia and Qatar would still stage the tournaments.    

Although some oil traders are betting that $60 a barrel will be a floor, others are not convinced and think a renewed slide towards $50 remains a possibility. Uncertainty is so high that the CBOE crude oil volatility index last week hit its highest level since 2011.

Any renewed drop of oil this week could hit Gulf stock markets again, particularly Saudi petrochemical stocks.

However, the bourses appear to have found at least short-term bottoms, and Gulf investors are no longer so worried that lower oil prices will mean sharp cut-backs in government spending in the region. Governments of the big Gulf economies will be able to use their huge fiscal reserves to cover any budget deficits for years.

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