— Saudi Arabia’s bourse made its largest one-day drop in three weeks Wednesday, leading losses across regional markets as global stock jitters and a drop in oil prices spurred investors to reduce their risk exposure.
The stock benchmark Tadawul All Share Index plunged 2.03 percent to close at 7,221.5 points, its biggest one-day loss since April 15 to trim year-to-date gains to 12.5 percent.
“The Saudi market correction is driven by sentiment ... globally markets are seeing a bloodbath,” said Tariq Alalaiwat, equity research analyst at NCB Capital. “There is little news in the market and what there is, is all bad news.”
Worst-hit were insurance stocks, a usual target for retail investors because their small-cap status makes them easier to move. The sector’s index dropped 5.2 percent. Bluechips Saudi Basic Industries Corp. (Sabic) and Al Rajhi Bank fell 1 percent each.
Saudi petrochemical stocks tend to track oil prices, with crude impacting their bottom line. Oil is also seen as a proxy for global economic activity and therefore demand for petrochemical products.
“There are concerns about global growth and how long Europe can withstand its debt problems,” said Mateb Al Ghanim, portfolio manager at Amlakuna Investment Group in Riyadh.
New York’s WTI crude dropped 20 cents to $96.81 a barrel. Brent North Sea crude shed 47 cents to $113.20 a barrel. — SG/Agencies