TASI crashes to 7,300 in blue chip sell-off

Saudi Arabia’s stock market crashed on Tuesday as investors cashed in blue chips that had soared over the past five sessions. A downward shift in oil prices, following eight days of gains, also weighed on sentiment.

The benchmark Tadawul All Share Index (TASI) dropped over 2.6 percent to just below 7,300. The index lost 194 points, the biggest decline seen in about 10 months. Trading turnover slipped further, to just SAR 3 billion.

The Saudi corporate sector is set to report financial earnings for the second quarter 2017 soon. Analysts expect results to be mixed, with banking and petrochemical sectors likely to see a tepid quarter.   

“Overall we believe Q2 is likely to be a mixed quarter with some reversal of gains for those stocks that have seen sharp rally post the news of MSCI watch list inclusion but are likely to report weak results in Q2,” said Al Rajhi Capital in a preview Tuesday.

Most sectors closed in the negative with banks, and F&B sectors leading the losses.

Among lenders, blue chips National Commercial Bank fell over 7 percent to SAR 51.30 and Samba fell 7 percent to SAR 24.20. Saudi British Bank slumped over 6 percent to SAR 25.

Heavyweight Al Rajhi Bank was 2.7 percent lower at SAR 65.90.

Food and beverage retailers that had remained buoyant over the Ramadan-Eid period, plunged nearly 5 percent. Savola Group and its associate Almarai fell heavily. Savola closed 5.6 percent lower at SAR 47 while Almarai was 5 percent down at SAR 88.10.

Elsewhere, the petrochemicals sector saw a broad pull-back. SABIC fell 1 percent to SAR 17.76 while recent favorite dropped nearly 5 percent to SAR 50.90.

Wafa Insurance pared some early gains to finish 3 percent up at SAR 21.90. The Saudi central bank has allowed the loss-making insurer to issue new policies, lifting a suspension. 

Write to Brinda Darasha at brinda.d@argaamplus.com