(Updates with Saudi Arabia, Egypt open)
DUBAI, Dec 17 (Reuters) - Gulf stock markets were relatively calm in early trade on Wednesday after falling sharply in the previous session when Brent crude oil dropped below $60 per barrel.
Crude was trading at roughly the same levels, just below $60, on Wednesday. But Saudi Finance Minister Ibrahim Alassaf said his country would continue spending on development projects and social benefits in its 2015 budget as part of a “counter-cyclical” policy, which may have reassured investors that the impact of cheap oil would be limited.
Dubai’s stock index, which tumbled 7.3 percent on Tuesday and was down 28 percent this month, rose 0.9 percent by midday as half of traded stocks gained.
Local investors hope that foreigners looking to exit the market before the end of the year have already done so and that selling pressure will now subside, said Sanyalak Manibhandu, manager of research at NBAD Securities in Abu Dhabi.
Also, some may be betting that money from Emaar Properties’ 9 billion dirham ($2.5 billion) dividend payout on Dec. 23 will be partly reinvested in the market.
“Valuations are now very attractive compared to what they were early in the year,” Manibhandu said. However, “going forward, for sustainability you need to see crude prices not fall much from where they are now.”
Abu Dhabi’s index rose 2.4 percent and Oman’s bourse edged up 0.8 percent. Qatar added 1.0 percent and Kuwait fell 1.0 percent.
Saudi Arabia’s market edged up 0.3 percent, largely on the back of banking stocks. Shares in National Commercial Bank rose 1.7 percent and Al Rajhi Bank jumped 2.0 percent.
Alassaf made his statement about the 2015 budget in a statement carried on state news agency SPA; he appeared to be trying to reassure investors who fear the oil price slide could force sharp cut-backs in state spending.
The statement followed a series of similar remarks by economic officials in the United Arab Emirates, Kuwait and Qatar, who have promised to maintain state spending on major projects.
Egypt’s market added 0.9 percent after dropping in line with Gulf bourses in the previous session. (Reporting by Olzhas Auyezov; Editing by Andrew Torchia)