Saudi plunges to 10-month low on Egypt worries
Riyadh, November 25, 2012
Saudi Arabia's bourse slumped to a 10-month closing low on Sunday as political turmoil in Egypt spooks investors mainly due to the Kingdom's heavyweight sectors - petrochemicals and banking.
Saudi Basic Industries Corporation (Sabic), the world's largest chemicals producer fell 2.3 per cent. Al Rajhi Bank dropped 1.2 per cent and Samba Financial Group shed 2.2 per cent.
The kingdom's index dropped 2.1 per cent to 6,524 points, its lowest close since January 25.
"The index broke the key support of 6,550 sharply to the down side," says Mohabeldeen Agena, head of technical analysis at Cairo's Beltone Financial. "We are expecting the bears to continue pushing it downward towards 6,300 levels."
Egypt President Mohamed Mursi issued a decree on Thursday that defends his decisions from judicial review, causing fury among his opponents and prompting violent clashes in central Cairo and other cities. Cairo's index tumbled 9.6 per cent.
Investors are concerned Egypt's political unrest could have widespread implications for the Middle East.
Back in Saudi Arabia, insurance stocks tumbled in heavy trade, with the sector's index slumping 6 per cent. The sector's small-cap stocks are prone to exaggerated moves due to their tight free-floats.
This volatility usually attracts retail traders for speculative, short-term trading, with the sector's high volumes also making it easier for investors to exit quickly.-Reuters