Iran threat hits Saudi stocks

MARKET JITTERS: Saudi's main index has seen its biggest one-day drop in almost four months after Iran warned of reprisals on its neighbours if it was attacked. (Getty Images)

Saudi Arabia's main index closed down almost 3 percent, making its biggest one-day decline in almost four months, as comments by Iran on a possible disturbance of Gulf oil maritime route weighs on market sentiment.

Saudi Basic Industries Corp. (SABIC) dropped 3.21 percent and Al-Rajhi Bank 2.56 percent, pulling the benchmark down 2.8 percent to 9,313.40 points.

"The news about Iran indeed has impacted the sentiment in the market although most investors are confident enough an attack is not imminent," says Abdulla al-Aqil, trader at Samba Financial.

Iran's Revolutionary Guards said the country would impose controls on shipping in the vital Gulf oil route if the oil producer was attacked, according to a newspaper report on Saturday.

The index posted its sharpest single-day decline since March 2, closing down for its third straight session after a three-day rally at the beginning of last week.

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