Saudi Shares Fall Second Day in Four on Faltering U.S. Recovery
Saudi Arabia’s benchmark index fell the second day in four on concern a slowdown in the U.S. may derail global growth, and as crude oil prices fell.
Al Rajhi Bank (RJHI), Saudi Arabia’s second-largest publicly traded lender by assets, slipped a second day this week. Saudi Basic Industries Corp. (SABIC), the world’s biggest chemicals maker, decreased 1.4 percent. The Tadawul All Share Index (SASEIDX) declined 0.7 percent to 6,429.60, at 11:46 a.m. in Riyadh.
“U.S. economic indicators continued to show that the recovery may be stalling and global markets fell on that news,” said Fuad Aghabi, a director at Ajeej Capital in Riyadh. “The Saudi market is reacting to the uncertainty surrounding the world economy with lower volumes typical of Ramadan trading.”
Emerging market and European stocks retreated after the U.S. Institute for Supply Management’s factory index showed manufacturing activity expanded in July at the slowest pace in two years, coming in below the lowest estimate in a Bloomberg News survey. The MSCI Emerging Markets Index fell 1.2 percent and the Stoxx Europe 600 Index declined 0.8 percent.
Futures on the S&P 500 Index (SPX) decreased 0.5 percent today, suggesting U.S. stocks will fall at the open even after the House of Representatives approved legislation to raise the debt limit.
Crude oil for September delivery dropped as much 0.9 percent to $94.03 a barrel on the New York Mercantile Exchange. The six nations of the Gulf Cooperation Council supply about a fifth of the world’s oil.
The Islamic holy month of Ramadan, when Muslims fast from sunrise to sunset, started yesterday. About 24 million shares traded on the Tadawul today, compared with a 12-month daily average of 165 million shares, according to data compiled by Bloomberg.
Al Rajhi Bank dropped 0.3 percent to 72.25 riyals. Sabic fell 1.4 percent to 103.75 riyals.
The Bloomberg GCC 200 Index (BGCC200) slipped 0.3 percent. Oman’s MSM30 Index (MSM30) decreased 0.2 percent, Bahrain’s gauge fell 0.6 percent and Qatar’s measure was little changed. In the United Arab Emirates, Dubai’s DFM General Index (DFMGI) rose 0.1 percent while Abu Dhabi’s measure gained less than 0.1 percent. The Kuwait SE Price Index (KWSEIDX) rose 0.1 percent.
To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net
To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net
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