Saudi rally ends as oil prices drop

Banks, petrochems weigh on Saudi Arabia's TASI, which eases from Sunday's four-month high
Saudi rally ends as oil prices drop
(Getty Images)
By Reuters
Mon 23 May 2011 10:48 AM

Banks and petrochemicals weighed on Saudi Arabia's index TASI, which eased from Sunday's four-month high amid an uncertain global backdrop and declining oil prices.

The main benchmark ended 0.7 percent lower at 6,703 points, ending a four-session winning streak as eight of the 10 largest stocks by market value ended lower.

The top two sectors declined, with the banking index down 0.9 percent and petrochemicals down 0.7 percent.

Saudi Basic Industries Corp (SABIC) and Al Rajhi Bank fell 0.2 and 0.7 percent respectively.

Crude oil futures slipped more than $3 on Monday due to the peripheral euro zone's debt crisis, which pushed the dollar to a two-month high versus the euro and knocked broader equity markets lower.

UAE and Qatar bourses slumped, taking their cue from weakness in global stocks as doubts about Europe's ability to manage its debt hammered developed markets.

Dubai's index fell two percent to a seven-week low of 1,547 points. It was down 5.4 percent in May.

"We can clearly see signs of a short-term change in trend after the DFMGI tried to hold its support level at 1,550 last week but penetrated it today," says Sleiman Aboulhosn, assistant fund manager at Al Masah Capital.

Dubai's district cooling firm Tabreed plunged to a five-week low, slumping ten percent after a share dilution.

It said on Sunday it had issued 415.68 million shares to repay an Islamic bond.

Most stocks ended lower, with Emaar Properties and Dubai Financial Market fell 3.2 and 4 percent respectively.

Abu Dhabi's benchmark ended 0.6 percent down at 2,632 points, its lowest close since April 12 as six of the ten largest stocks decline.

Qatar's index dipped 1.9 percent to 8,441 points, an eight-week low. All bar two stocks drop.

"The market's been range-bound since the end of March (from) 8,400 to 8,850 - any break out of this range should see a significant move in either direction," Aboulhosn adds.

Heavyweights Qatar National Bank and Industries Qatar shed 2.5 and 2.8 percent respectively.

Doubts about Europe's ability to manage its debt hammered markets on Monday, knocking the single currency, driving up bond yields and dragging down equities in Europe and elsewhere.

 

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