Saudi Arabian stocks rose the most in three weeks as crude oil climbed and evidence mounted that the global economy is recovering from its worst recession since 1945.

Petrochemical stocks top the climbers' list as investors track an oil rally late last week. Saudi Basic Industries Corporation, the world's largest chemical maker by market value also known as Sabic, led the gains among oil and chemical companies.

Halwani Brothers, the Saudi Arabia-based food maker, advanced to its highest level in more than a year.

"The backdrop of strong oil prices is certainly helping the Saudi market," said Ali Khan, Head of cash-equity trading at Dubai-based Arqaam Capital.

"Global optimism is another catalyst that's pushing the index higher."

The Tadawul All Share Index advanced 2.5 per cent, the most since May 9, to 5,933.54 in Riyadh.

The market is up 23 per cent year to date and 5.5 per cent this month.

Stocks worldwide rallied on Friday after reports showed industrial production in Japan increased the most since 1953, while India's economy expanded faster than economists estimated.

Crude for July delivery gained $ 1.14 yesterday, or 1.8 per cent, to $ 66.22 a barrel, the highest since November 4. Oil advanced 30 per cent in May, the biggest monthly increase since March 1999. Saudi Arabia is the world's largest oil exporter.

Sabic surged 5.8 per cent to SR68.50 (Dh67.08), the most since May 9. Halwani Brothers climbed 3.5 per cent to SR41.4, the highest since July 19.

Saudi Electricity Company, the state-controlled power producer, rose one per cent to SR10 after saying it will establish new electricity generation, transport and distribution units as part of its restructuring plans.

Allied Cooperative Insurance Group, or Saudi ACIG, jumped 9.8 per cent to SR70.

The company yesterday said it was granted a licence by Saudi Arabian Monetary Agency to engage in general and healthcare insurance activities.