Saudi index pares losses to 5.4% as 79 stocks fall to limit

The Tadawul All Share Index (TASI) pared losses towards the close of trading on Sunday to finish 5.4 percent lower at a five-year low of 5,520 after plunging more than seven percent within the first hour of opening.

The sell-off was on the back of oil prices plunging below $30-mark last week at the prospect of new crude surging into the already oversupplied market after Western sanctions on Iran were lifted Saturday.

Brent crude, the key benchmark for Middle East’s crude exporters, closed at $28.94 per barrel Friday on London’s ICE after falling over six percent in the session.

“It seems that fundamentals have been unceremoniously dumped in favor of a constant watch on the oil price, with this metric determining whether stock markets rise or fall,” Chris Beauchamp, market analyst at IG Markets said in a note.

A few disappointing financial results from major cement and petrochemical producers in Saudi Arabia also fed into the negative sentiment.

On Tadawul, only a single stock, Bahri, managed to make any gains. The shipping company posted a 240 percent surge in net profit for FY-2015 to SAR 1.82 billion.

NCB, Saudi Kayan, Petro Rabigh, Mobily, and developer Dar al Arkan fell to their lowest since listing as 79 stocks went limit down.

The petrochemicals sector, which is closely linked to the oil industry, closed over five percent lower after rebounding slightly in the latter part of the session. Market and sector heavyweight SABIC pulled back to SAR 65.25, after falling six percent earlier.        

Write to Brinda Darasha at brinda.d@argaamplus.com