Saudi stock market falls sharply for a second day
dubai — Saudi Arabia’s stock market fell sharply for a second straight day on Wednesday, leading the entire region down, in response to weak oil prices and government austerity measures.
The Saudi equities index, which had retreated 3.8 per cent on Tuesday, sank a further 3.4 per cent to 5,534 points, its lowest finish since January 21. It has tumbled 19.5 per cent from a peak in April.
Trading volume climbed to a two-month high as the index fell below technical support on the February low of 5,551 points, though it closed off its intra-day low. It has stronger support at the January low of 5,349 points.
Saudi Basic Industries slid four per cent. PetroRabigh outperformed the sector, dropping only 2.1 per cent, after saying it would proceed eventually with a rights issue that has been delayed since 2015.
The Saudi insurance sector also suffered after the government said it would reduce bonuses and perks for public sector workers; insurance stocks are favoured by local retail investors, who will have less disposable income because of the austerity drive.
Among other stocks directly exposed to consumer sentiment, travel agent Al Tayyar plunged 8.2 per cent. Some telecommunications firms and utilities, seen as defensive shares, performed relatively well and Zain Saudi was one of only four rising stocks, gaining 3.1 per cent.
Dubai’s index fell 0.4 per cent in thin trade as Emaar Properties lost one per cent. Abu Dhabi dropped 0.5 per cent with another real estate firm, Aldar Properties, falling 1.5 per cent.
Qatar edged down only 0.1 per cent, supported by a 1.2 per cent gain by Industries Qatar.
In Egypt, the index dropped 0.5 per cent in a broad-based decline. — Reuters