Saudi Arabia's stock market, the largest in the Arab world, posted its biggest drop on record as Saudi stocks retreat in response to a global equity rout and concerns over future earnings of the country's largest firm.

The index slid 9.67 percent to 9,338.54 points, its sharpest one-day slide on record, surpassing the 9.36 percent decline on July 15, 2006 during a stock market crash.

Saudi Basic Industries Corp (Sabic), the world's largest chemicals firm by market value, led the sell-off, dropping 9.93 percent, its sharpest drop since July 2006.

The stock has fallen 24.7 percent since its closing price on Jan. 19, when it missed fourth-quarter earnings forecasts and said the U.S. mortgage crisis had hurt demand for chemicals.

'Sabic's announcement that its fourth-quarter profit fell on ... lower demand for petrochemicals triggered concerns about petrochemical prices and a global recession,' said Abdullah al-Rashoud, chief executive at KSB Capital Group. - Reuters