Saudi Stocks Drop to Nine-Month Low, Leading Mideast, on Region's Unrest

Saudi Arabia’s benchmark stock index plunged to a nine-month low, leading a drop in Middle East markets, on concern clashes in Libya that caused oil prices to surge to a more than two-year high will stall a global recovery.

Al-Rajhi Bank, the kingdom’s largest publicly traded lender by market value, dropped 5.2 percent and Saudi Basic Industries Corp., the world’s largest petrochemicals maker, tumbled to the lowest since October. Saudi Arabia’s Tadawul All Share Index slid a 10th day, slumping 5 percent to 5,950.64, the lowest since June 6, at the 3:30 p.m. close in Riyadh. The measure has lost 11 percent since Tunisia’s former president Zine El Abidine Ben Ali fled the country amid protests that spurred similar uprisings in nations across the region. Oman’s measure decreased 2.8 percent as protests erupted in the sultanate.

“With no clear end to the geo-political turmoil in the region, local investors are erring on the side of caution,” said Amro Halwani, senior equity sales trader at Shuaa Capital PSC in Riyadh. “The regional uncertainty, with Libya this week’s reason to sell, has pushed fundamentals out of the picture. The surge in oil is an ongoing threat of a possible derailing in the global economic recovery, and gave investors a reason to move away from riskier assets.”

The United Nations Security Council voted to freeze the foreign assets of Libyan leader Muammar Qaddafi and four aides and to bar them from traveling, in the broadest international effort to halt the attacks. Protests calling for the ouster of Qaddafi have been met with a violent crackdown. Qaddafi has bolstered defenses in the capital, Tripoli, and launched counter-strikes against opponents who have seized much of the rest of the country.