The Saudi stock market led Gulf equities higher on Wednesday after the kingdom said it will open its capital market to all categories of foreign investors from next month, while traders awaited U.S. labour-market data for clues on the Federal Reserve's policy path.
Saudi Arabia's benchmark stock index (.TASI), opens new tab rose as much as 2.5% and ended 1.6% higher, its biggest intraday gain in more than three months, with most constituents rising.
Finance, communication and consumer staples shares led advances, with heavyweight Al Rajhi Bank (1120.SE), opens new tab and Saudi National Bank (1180.SE), opens new tab rising 3.4% and 5.9%, respectively.
Exchange operator Saudi Tadawul Group (1111.SE), opens new tab climbed 5.2%, its sharpest rise since late September.
The rally followed a statement from the Capital Market Authority on Tuesday saying all foreign investors will be able to invest directly in the main market from February 1, after the regulator scrapped the "Qualified Foreign Investor" regime and removed rules that previously limited access.
The CMA said the measures aim to broaden the investor base, support inflows and improve liquidity, noting foreign investors' holdings exceeded 590 billion riyals ($157.3 billion) by end-Q3 2025, up from 498 billion riyals at end-2024.
"The announcement lifted sentiment as investors viewed it as a move to broaden participation, improve liquidity and support inflows," said Milad Azar, a market analyst at XTB MENA.
Investors remain focused on whether authorities will eventually lift the 49% foreign ownership cap, he added.
Dubai's benchmark stock index (.DFMGI), opens new tab rose 1.1% to 6,249, its highest since 2008, with the gains being broad based. Blue-chip developer Emaar Properties (EMAR.DU), opens new tab advanced 2.1% and Air Arabia (AIRA.DU), opens new tab surged 4.6%.
The Abu Dhabi benchmark index (.FTFADGI), opens new tab gained 0.5%, led by healthcare, real estate and financial stocks. Aldar Properties (ALDAR.AD), opens new tab added 1.5% and Abu Dhabi Islamic Bank (ADIB.AD), opens new tab rose 2.2%.
Meanwhile, the UAE's non-oil private sector maintained robust growth in December, although the pace of expansion moderated slightly from the previous month, a survey showed on Tuesday.
The Qatari benchmark index (.QSI), opens new tab gained 0.7%, with Qatar Islamic Bank (QISB.QA), opens new tab rising 1.6% and Qatar Aluminum Manufacturing (QAMC.QA), opens new tab adding 2.3%.
In Oman, the stock index (.MSX30), opens new tab climbed 1.2%, with Bank Muscat up 1.5% and Global Financial Investments Holding (GFIC.OM), opens new tab jumping 6.7% after state media reported plans to set up an international financial centre.
Investors were also watching U.S. data due later on Wednesday, including the JOLTS survey and ADP private payrolls, ahead of Friday's monthly jobs report. Markets have priced in two Fed rate cuts this year, but any surprises could shift expectations.
The Fed's stance matters for Gulf economies, where most currencies are pegged to the U.S. dollar, anchoring regional monetary policy.
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