Saudi Arabia’s benchmark index gained 0.6%, helped by a 1.7% rise in Retal Urban Development Co.

The Saudi stock market could extend its gains this week with sentiment among local investors improving. The main index has been able to climb above this year’s peak, providing a strong impetus for investors to buy, said Ahmed Negm, Head of Market Research MENA at XS.com.

“At the same time, the local economy could find support in the potential for higher oil prices in the near to medium term.”

Oil prices - a key catalyst for the Gulf’s financial markets - were little changed on Thursday but posted a third weekly gain as markets weighed further production cuts targeted by OPEC+ and falling US oil inventories against fears about the global economic outlook.

In Qatar, the index dropped 0.9%, with most of the stocks on the index falling into negative territory including petrochemical maker Industries Qatar, which was down 1%.

The World Bank has revised its 2023 economic growth projection for the oil exporters of the six-member Gulf Cooperation Council (GCC) downwards to 3.2% in its latest update released on Thursday, from 3.7% forecast in October.

The GCC is expected to post a fiscal surplus of 3.2% of GDP in 2023, down from 4.3% in 2022. Outside the Gulf, Egypt’s blue-chip index was down 0.2%.

According to Negm, the Egyptian bourse could record more losses as the country continues to see financial and inflationary pressures.

“At the same time, international investors could maintain their selling trend as the appetite for risk decreases.”

Egypt’s headline inflation rate is set to hit an all-time high in March, a Reuters poll showed on Thursday, following a continued shortage of foreign currency after more than a year of devaluations of the Egyptian pound.