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Wed 28 Sep 2016 03:58 PM

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Saudi stocks slump again on oil, austerity measures

Stock market falls sharply in late trade as Brent oil futures sink about 3% to around $46 a barrel

Saudi stocks slump again on oil, austerity measures
A Saudi investor monitors the stock exchange at the Saudi Stock Exchange. (Fayez Nureldine/AFP/Getty Images)

Saudi Arabia's stock market fell sharply for a second straight day on Wednesday in response to weak oil prices and government austerity measures.

The Saudi equities index, which retreated 3.8 percent on Tuesday, was down a further 4.4 percent to 5,479 points in late trade, falling below technical support on the February low of 5,551 points. It has stronger support at the January low of 5,349 points.

Brent oil futures sank about 3 percent to around $46 a barrel on Tuesday after Iran rejected an offer from Saudi Arabia to limit its oil output in exchange for Riyadh cutting supply.

This hit petrochemical stocks on Wednesday, with Saudi Basic Industries sliding 5.2 percent. But selling of stocks was broad-based after the government said this week it would scale back bonuses and perks for public sector workers under its austerity drive; illiquid insurance stocks and other speculative stocks favoured by local retail investors also plunged.

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