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Saudi stocks dive 7%, wiping out 2018 gains

  • Published at 10:17 pm October 14th, 2018
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FILE PHOTO: A Saudi trader observes the stock market on monitors at Falcom stock exchange agency in Riyadh, Saudi Arabia February 7, 2018 REUTERS

All 15 sectors in the market were in the red while almost all listed shares dropped

Saudi stocks dived 7% in early trading on Sunday as the oil-rich kingdom comes under increasing international pressure over the disappearance of journalist Jamal Khashoggi.

The Tadawul All-Shares Index (TASI) quickly lost more than 500 points on the first trading day of the week, wiping out all the gains it had made since the start of the year.

The index had already dropped 3% on Thursday, following a rout on world stock markets fuelled by worries about higher interest rates and US President Donald Trump's attacks on the Federal Reserve.

The TASI was trading at just above 7,000 points, a 10-month low, having reversed all of the 18% gain it had notched up since the start of 2018.

All 15 sectors in the market were in the red while almost all listed shares dropped.

In just two sessions the Saudi bourse, the largest in the Arab world, has shed almost $50 billion of its capitalization, which now stands at around $450 billion.

Mohammed Zidan, market strategist at Thinkmarket in Dubai, said the drop in Saudi stocks was the result of panic selling because of several political and economic factors.

"There has been a kind of uncertainty surrounding the situation of the disappearance of Khashoggi which has caused the market to fall," Zidan told AFP.

Trump threatened Riyadh on Saturday with "severe punishment" if Khashoggi, a contributor for the Washington Post who has been critical of Crown Prince Mohammed bin Salman, was killed inside its Istanbul consulate.

With the mystery over Khashoggi unresolved after he failed to reappear after walking into the consulate on October 2, a pro-government Turkish daily said the Saudi national had recorded his own interrogation inside the mission on an Apple Watch.