Saudi shares decline on oil, SABIC and Herfy Food lead

SHARE DROP: Saudi shares hit a two week low as oil prices drop to a seven week low. (Getty Images)

Saudi Arabian shares fell the most in two weeks, led by Saudi Basic Industries Corp, as oil prices dropped to a seven week low and European stocks fell for a fourth consecutive week.

Saudi Basic, or Sabic, fell 2.3 percent to $22.8, the biggest decline since Nov 3. Herfy Food Services Co., the kingdom’s largest fastfood chain, which started trading Feb 2, dropped 2.6 percent to $15.

The Tadawul All Share Index fell 1.05 percent to 6,215.71.

Crude oil fell to a seven week low yesterday, as the dollar surged on speculation European efforts to cut deficits will curb growth, prompting investors to sell commodities.

European stocks declined for a fourth week, the longest losing streak since July, on concern efforts by Greece, Portugal and Spain to reduce their deficits will hurt the region’s economic recovery.

In an email today, Riyadh based John Sfakianakis, chief economist, Banque Saudi Fransi, said: “The Saudi market finds it hard to decouple from the downward pressures of other global equities over the past few days.”

He added: “Oil also witnessed a sharp fall, which adds to uncertainty.”

Saudi Arabia’s index is the only Arab Gulf index tracked by Bloomberg that trades on Saturday. (Reuters)

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