Saudi index falls on economic worries, Egypt extends losses

Agencies |Riyadh

The Daily Tribune – www.newsofbahrain.com

Saudi Arabia’s stock market ended lower yesterday, ending three sessions of gains, in response to Friday’s fall in oil prices and global shares.

Oil fell by more than $2 per barrel on Friday, swept up in a wider rout in global equities on fears of a looming recession, after central banks across Europe and North America signalled they will continue to battle inflation aggressively.

Saudi Arabia’s benchmark index (.TASI) dropped 0.4%, snapping a three-day winning streak, hit by a 2.5% fall in Riyad Bank (1010.SE). Elsewhere, oil giant Saudi Aramco (2222.SE) retreated 0.6%.

Saudi Basic Industries Corporation (SABIC) (2010.SE) on Sunday announced signing of a memorandum of understanding with Aramco and China Petroleum & Chemical Corporation (600028.SS) to study the economic and technical feasibility of developing a new petrochemical complex to be integrated with an existing refinery in Yanbu, Saudi Arabia.

However, shares of SABIC were up 0.7%.

On Friday, MSCI’s world stock index (.MIWD00000PUS) lost 1.1% and touched its lowest level in over a month, as a hawkish tone from central bankers and weak data stoked recession fears.

The Fed was one of a slew of central banks that jacked up interest rates and signalled that the fight to tame inflation this week was mounting Most Gulf Cooperation Council countries, including Saudi Arabia, have their currencies pegged to the US dollar and follow the Fed’s policy moves closely, exposing the region to a direct impact from monetary tightening in the world’s largest economy.

Outside the Gulf, Egypt’s blue-chip index (.EGX30) declined 2$, extending losses from the previous session when it retreated from over four-year highs.

Qatar and Bahrain were closed for a public holiday.