Dubai: Saudi Arabia’s Tadawul index jumped on Sunday after the MSCI said it would add the kingdom to its emerging market index, a move that is expected to attract billions of dollars in funds.

The Tadawul All Share Index rose 1.76 per cent, ending the day at 8,350.96. Insurance stocks led the gains, with the insurance gauge ending 2.42 per cent higher as Saudi Arabia marked the lift of its ban on women driving.

The lifting of the controversial ban is one of many structural and economic reforms the kingdom is attempting, and was mostly met with jubilation on the streets on Sunday.

In the UAE, the main equity indices were little changed as trade values dwindled. The Dubai Financial Market (DFM) index ended 0.03 per cent higher at 2,929.06 as the Abu Dhabi Securities Exchange (ADX) general index rose 0.34 per cent to 4,550.51.

“Saudi is doing quite well today, and that’s a reaction from investors to the MSCI inclusion, which was, of course, positive,” said Saleem Khokhar, head of equities at First Abu Dhabi Bank’s asset management division.

“The rest of the market is a little bit lacklustre. Apart from the obvious, which is the Abraaj situation, I think the other reasons could be that we’re really entering into that summer season, so you’re seeing a lot of the investors starting to prepare to get away for the summer.”

News that private equity group, Abraaj, filed for provisional liquidation soured sentiment on the UAE’s markets last week as did concerns on global trade tensions, both of which led to selling activity across most stocks.

Khokhar said that he expected trade values to remain low for the next month or two as institutional investors set up their positions for the summer. He, however, pointed out that UAE stocks offered attractive options.

“Valuations at this point in time are quite compelling, and now you’ve got some specific catalysts beginning to be put in place and that is more government initiatives, which are going to [be] drivers going forward... but again, I think it’d be September before we really start to see things kick in,” he said.

In Dubai, Drake and Scull International, the most actively traded stock, saw its share prices plunge 6.54 per cent to Dh1 as the company continues to grapple with losses and structural changes. Air Arabia ended the day flat, after falling nearly 12 per cent in the past few trade sessions due to concerns about the carrier’s investments in Abraaj.