Saudi Arabia’s stock index fell but closed well off its lows on Tuesday after the 2016 state budget introduced spending cuts, rises in fuel, natural gas feedstock and electricity prices, and tax hikes. Other markets in the region were mixed.

Qatar closed flat. Petrochemical shares were strong as Saudi Arabia’s budget may weaken competition from producers in that country; Industries Qatar added 1.8 percent and Mesaieed Petrochemical rose 0.4 percent.

Analysts welcomed the budget as showing the government’s willingness to adopt difficult reforms to address a huge deficit caused by low oil prices. As such, it could help to sustain confidence in the riyal’s peg to the US dollar.

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