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Saudi shares fall 5.2pc to 5-month low

Riyadh, August 6, 2011

Saudi shares drop about 5.2 per cent to a low of nearly five months, weighed by petrochemical and banking shares, after S&P downgraded the credit rating of the US. 

The US lost its top-tier AAA credit rating from Standard & Poor's on Friday in an unprecedented blow to the world's largest economy in the wake of a political battle that took the country to the brink of default.

'The market is being hit by the action of Standard and Poor's. It's very hard to predict (how low the market might fall), but I don't think I would go too much lower today,' says Saudi economist Abdulwahab Abu Dahesh as the market was trading 4.6 per cent down.

The index falls to 6,092 points, its lowest level since mid-March. The petrochemical index sheds 7.1 per cent and the banking index loses 4.7 per cent.

'The market is lilkely to wait and see how other markets react next week,' Abu Dahesh said.

Petrochemical giant Saudi Basic Industries Corp (SABIC)  lost 5.5 per cent and heavyweight Al-Rajhi Bank  dropped 4.9 per cent. – Reuters




Tags: Standard & Poor’s | Saudi shares | US credit rating | Riydh |

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