DUBAI: Aug 23 Saudi Arabia’s stock market plunged again in early trade on Sunday in response to a fresh slide of oil prices and the decision by credit rating agency Fitch to cut its outlook for the kingdom. Egypt’s bourse also fell sharply.
The main Saudi stock index was down 5.2 percent at 7,594 points after 20 minutes of trade, nearing major technical support at the December low of 7,226 points. This brought its losses so far this month to 16 percent.
Selling was indiscriminate, with petrochemical producer Saudi Basic Industries Corp losing 5.6 percent, miner Ma’aden down 6.4 percent and Alinma Bank sinking 4.8 percent.
Fitch lowered its outlook for Saudi Arabia’s foreign and local currency issuer default ratings to “negative” on Friday from “stable”, citing cheaper oil, while affirming the ratings at ‘AA’. Standard & Poor’s cut Saudi Arabia’s credit outlook to negative in February; the third major rating agency, Moody’s, has not yet taken such action.
Egypt’s stock index dropped 4.0 percent as stocks were sold across the board. Although Egypt’s economy should benefit from low oil prices, it receives aid and investment from the Gulf, while the turmoil in global equity markets has also hit investor confidence in Cairo.