Drop in oil price weighs on Tadawul

Saudi Arabia’s stock market fell sharply yesterday as tumbling oil prices provoked broad selling of blue chips.

The Saudi index slid 1.2 per cent to 7,660 points, its lowest close in nearly three weeks after oil plunged roughly 7 per cent overnight.

All 14 petrochemical stocks declined, with the biggest, Saudi Basic Industries, losing 1.8 per cent. Eleven of 12 banking stocks also dropped as the largest, National Commercial Bank, declined 2.4 per cent. If the oil price slide continues, the government’s plans to boost spending next year could be affected as revenues fall, squeezing business at banks.

Falling stocks outnumbered gainers by more than three to one but retailer and mall operator Fawaz Abdulaziz Alhokair jumped to hit its 10 per cent daily limit after MSCI decided to add the stock to its Saudi Arabia small cap index.

Consumer appliance company Shaker increased 5.2 per cent, having risen from near record lows in heavy trade over the past two days.

The Abu Dhabi index was up 1.1 per cent at 5,021 points as First Abu Dhabi Bank, the largest lender in the UAE, rose 2.8 per cent. MSCI decided to double its weight in the MSCI emerging markets standard index, Arqaam Capital said.

Abu Dhabi Commercial Bank rose 1 per cent in light trade while Union National Bank added 0.6 per cent.

Egypt’s blue-chip index lost 0.4 per cent at 13,487 points as investment bank EFG Hermes Holding fell 2.5 per cent and Pioneers Holding tumbled 7.5 per cent.

In Dubai, the index was flat at 2,776 points with Emirates NBD rising 2.8 per cent and Aramex adding 1.7 per cent. But Dubai Investments shed 3.8 per cent after MSCI decided to move the stock to its UAE small cap index from its UAE standard index.

But Egyptian Iron and Steel rose 4.4 per cent after it agreed to settle a $58.7 claim due to Banque Misr. In Kuwait the index was up 0.1 per cent at 5,297 points.

All 14 petrochemical stocks on the Saudi exchange declined, with the biggest, Saudi Basic Industries, losing 1.8%