Disappointment that inflows of foreign funds have been slow since index opened to direct foreign investment also drive decline
Saudi Arabia's main stock index fell below technical support on Sunday because of weak oil prices and disappointment that inflows of foreign funds had been slow. Markets in the United Arab Emirates and Qatar rose.
The Saudi index fell 1.7 percent to 9,344 points in thin trade, dropping below its 200-day average, now at 9,433.
Two straight daily closes below that support would be technically negative, implying a fresh wave of profit-taking after the index rose in anticipation of the market being opened to direct foreign investment on June 15.
Fresh inflows have been minimal so far, disappointing some local retail investors. The latest exchange data for foreign ownership of Saudi stocks, published on Sunday, showed no significant changes on Thursday.
A 2 percent drop in global oil prices on Friday further dented petrochemical shares. Saudi Basic Industries, the biggest petrochemical producer, slid 2.2 percent while PetroRabigh lost 1.8 percent.
Al Rajhi Bank sank 2.7 percent. The stock had been rising in anticipation of a U.S. interest rate hike, which could benefit banks such as Al Rajhi with large shares of interest-free deposits, but began easing on Thursday after the U.S. Federal Reserve published forecasts suggesting a hike might not be imminent.
Saudi Automotive Services leapt 2.4 percent to an eight-year closing high of 33.70 riyals in heavy trade. It has surged 24 percent in rising turnover since announcing in May that it had obtained 150 million riyals ($40 million) of bank financing to buy land and build facilities.
UAE and Qatar markets were stronger, possibly because Saudi Arabia's weakness eased fears that its opening to direct foreign investment would suck liquidity from other bourses.
But trading across the region was thin because of the onset of the Muslim holy month of Ramadan, which began last Thursday.
Dubai's main index closed 0.8 percent higher because of a fresh leap by mortgage provider Amlak, which has swung wildly since it resumed trading this month after a multi-year suspension due to debt restructuring.
Speculative traders again made Amlak Dubai's most heavily traded stock by far and at the close, it was up its 15 percent daily limit.
Abu Dhabi's market edged up 0.4 percent, largely because of First Gulf Bank, which gained 0.7 percent.
Qatar's market was flat in early trade but closed 1.1 percent higher, buoyed by Ezdan Holding's 5.9 percent rise. Ezdan's foreign ownership ceiling was raised on Thursday to 49 percent from 25.
Qatari property firms were also strong, with Barwa Real Estate up 1.5 percent.
Shehzad Janab, head of asset management and advisory business at Daman Investments in Dubai, released a study showing Dubai's index had risen during 80 percent of the months of Ramadan since 2005, while Qatar had gained 60 percent of the time.
Egypt's stock index fell 0.5 percent in a broad retreat, with real estate firm Talaat Mostafa slipping 0.7 percent.