21/11/2010
TASI drops to two-week low
Saudi shares dropped to a two-week low on investor speculation that Europe’s sovereign-debt crisis and China’s measures to tame inflation will undermine economic growth.
The Tadawul All-Share Index (TASI) closed 0.93 percent lower at 6,383.69 points on Saturday, weighed down by losses in the petrochemical and banking sectors in the first trading session after Eid holiday.
“Global concerns over the possibility of a tighter monetary policy in China and ongoing eurozone government debt problems have hit retail investor confidence,”.
Oil fell this week after China ordered banks to raise reserves in a move that may slow growth in the world’s largest energy-consuming country. Futures dropped 0.4 percent, settling at $81.51 a barrel on the New York Mercantile Exchange on Friday.
Prices have dropped 4 percent since Nov. 12. Saudi Arabia holds one-fifth of the world’s proven oil reserves.
Ireland is edging toward accepting a rescue package that may threaten its low-tax policies and put Irish voters on the hook to repay loans the central bank says may be worth tens of billions of euros.
Shares in petrochemical giant Saudi Basic Industries Corp. (SABIC) dropped 2.67 percent, the most since Oct. 16, and Saudi Fertilizers Co. lost 3.67 percent, the most in nearly six months.
The petrochemical index closed 1.82 percent lower to 6,170.12 points.
Heavyweight Al-Rajhi Bank closed 1.89 percent lower, dragging down the banking sector, which closed at 16,307.16, shedding 1.01 percent.
Sector activity was mostly negative with five gainers against 10 losers. Gains ranged from 0.02 percent in the insurance sector to 0.87 percent in the hotel and tourism sector. Losses ranged from 0.01 percent in the building and construction sector to 1.82 percent in petrochemical Industries.
The overall market breadth for the day was negative with 56 advancers against 65 decliners giving it an AD ratio of 0.86, the Financial Transaction House (FTH) said in its daily market commentary. The liquidity for the day reached SR 2.17 billion.
