Saudi Tadawul falls below 7,000 mark 

(MENAFN - Arab News) Weaker performance in banking and petrochemical stocks sent the Tadawul index to a three-month low yesterday.

The Tadawul All-Share Index (TASI) closed 1.88 percent lower at 6,966.37 points - its lowest closing level since Feb. 20.

The indices for Petrochemical Industries and Banks and Financial Services declined over two percent each yesterday.

Basil Al-Ghalayini, CEO of BMG Financial Group, commented that investors in the local market are keeping their eyes and ears close to the global markets.
"Hence, the instability in the world financial markets, especially in the Euro zone, coupled with the oil prices fall, are still making investors concerned about taking positions."

Jarmo T. Kotilaine, chief economist at the National Commercial Bank, said the reality is that market sentiment is highly fragile with the economy facing potentially sharp discontinuities.

"In this environment, the Saudi market tends to take its cues from developments elsewhere and the primary transmission channel is petrochemicals and banking, sectors generally thought most vulnerable to a renewed downturn," he added.

Although, he said: "Saudi banks are fairly protected from the woes in Europe, a euro zone shock would obviously revive concerns about counterparty risk.

"A gloomier global economic outlook is, other things equal, bad for oil and the relative competitiveness of Saudi petrochemicals," Kotilaine added.