The Tadawul All Share Index tumbled 4.2 percent, the biggest drop since August 6
Shares in Saudi Arabia, OPEC’s biggest oil producer, slumped the most in 10 months after crude fell to the lowest since October as employment reports in the US and Europe signalled fuel demand may tumble.
Al Rajhi Bank, the kingdom’s largest bank by market value, retreated to the lowest since January and Saudi Basic Industries Corporation, the world’s biggest petrochemical maker known as Sabic, slid 3.7 percent.
The Tadawul All Share Index tumbled 4.2 percent, the biggest drop since August 6, to 6,681.18 at the close in Riyadh. The measure lost 7.7 percent in May, the biggest monthly decline in two years.
Oil dropped 3.8 percent to US$83.23 a barrel in New York after the Labour Department said American employers added the fewest workers in a year in May. Oil prices are down 24 percent from this year’s closing high in February.
Brent dropped below US$100 for the first time since October. Gulf Arab oil exporters, including the Saudi Arabia and the UAE, supply about a fifth of the world’s oil.
“Oil prices are down to low levels and this is one of the reasons why the market is down,” said Riyadh-based Turki Fadaak, head of research at Albilad Investment Company.
“The global economic reports and Europe’s debt problems are also pressuring the market, but this is more of a psychological pressure than anything else, because the link between the Saudi economy and Europe are weak.”
The jobless rate in the euro region, which has been in the grips of a debt crisis for three years, reached a record high, of 11 percent in April and March. European stocks declined for the fourth week in five and US shares tumbled, erasing the Dow Jones Industrial Average’s 2012 gain.
Al Rajhi declined 3.1 percent to SAR70.50, the lowest level since January 4. Sabic fell to SAR0.90, the lowest close since November 27.
Saudi Arabia’s stock exchange is the only Gulf bourse operating on Saturdays.