Petrochemicals stocks led gains on Saudi Arabia's bourse as an overnight rebound in oil prices spurred the kingdom's investors to buy back beaten-down stocks.
Saudi Basic Industries (SABIC), the Gulf's largest listed company and one of the biggest petrochemicals producers in the world, rose 2.9 percent in early trade.
Two SABIC units, Saudi Arabia Fertilizers Co and Yanbu National Petrochemical Co (Yansab), climbed 2.1 and 5.3 percent respectively.
These gains helped the petrochemicals index rise 2.7 percent from Monday's 17-month low.
"Saudi petrochemical producers enjoy strong margins relative to their international peers because their feedstock prices are subsidised, but this advantage diminishes as oil prices fall," said Asim Bukhtiar, head of research at Riyad Capital.
"At the same time, petrochemical prices will also fall, so there are headwinds for the sector."
Oil prices rebounded 3-4 percent after touching five-year lows on Monday following OPEC's decision to maintain output and its market share in a battle with non-OPEC and North American producers.
Brent crude was trading at $72.12 at 0812 GMT, down 38 percent from a June 2014 high as a boom in shale oil production and weaker growth in China and Europe weighed on prices, while U.S. Light Crude was at $68.46.
The price collapse had hammered Saudi stocks, with the kingdom's index falling by about a fifth since mid-September to wipe out most of this year's gains.
The benchmark was up 1.6 percent at 8,854 points on Tuesday, trimming its losses this week to 2.2 percent. Monday's 1.1 percent rise was its first gain in six sessions.
"There's frustration among investors – they understand it's beyond their control, that it's mainly the oil drop," said Mohammad Omran, member of Saudi economic association.
"The drop is negative in the short term for the economy and capital markets, but it will be positive in the long term because it has severe consequences for the shale oil industry. Non-OPEC oil producers are much more negatively affected."
Elsewhere, Qatar's index gave back early-session gains to be down 0.08 percent at 12,846 points.
Qatar National Bank, Doha's largest listed company by market value, was the main drag, falling 1.4 percent.
Barwa Real Estate rose 2.3 percent after it said it had signed a deal to sell two plots of land for a combined 5.34 billion riyals ($1.47 billion) to an unidentified buyer.
Oman's benchmark climbed 2.6 percent to 6,602 points, rebounding from Monday's 12-week low.
Bank Muscat and Omantel were the main supports, adding 2.7 and 5.8 percent respectively.
The Egyptian market continued its downward movement in today’s session with the EGX30 Index falling 0.51% to record 9,187.00 points.
Meanwhile bourses in the United Arab Emirates are closed for a national holiday.
