May 3, 2020 / 12:07 PM / a month ago

MIDEAST STOCKS-Saudi index sees biggest daily fall in nearly two months

    By Ateeq Shariff
    May 3 (Reuters) - Saudi Arabia's stock market fell sharply
on Sunday, snapping three sessions of gains as the prospect of
more stringent measures to cope with the coronavirus and Moody's
downgrading of the kingdom's outlook soured investor sentiment.
    The kingdom's finance minister on Saturday said the country
will take strict and painful measures to deal with the economic
impact of the coronavirus pandemic and "all options for dealing
with the crisis are open."
    One measure would be to slow down government projects,
including mega-projects, to reduce spending, he said.
    Saudi Arabia's benchmark index plunged 5.7%, its
biggest intraday fall since March 09, weighed down by an 8% drop
in Al Rajhi Bank and a 5.2% fall in oil giant Saudi
    Moody's Investors Service cut Saudi Arabia's outlook to
"negative" from "stable" on Friday, citing higher fiscal risks
due to the crash in oil prices, and uncertainty about the
government's ability to offset revenue losses and stabilize its
debt in the medium term.
    "Market is down given the unavoidable austerity measures,
depressed economy and fiscal pro-cyclical measures. This is the
time to concentrate on saving the domestic economy and that
requires massive fiscal support and cutting excess fat inside
and acquisitions outside," said John Sfakianakis, senior scholar
at the University of Cambridge.
    "The domestic economy needs to take prescience at all costs
now as this is a never seen before crisis of multiple black
swans," he added. 
    In Dubai, the index closed 4% down, with Emaar
Properties sliding 4.8% after Moody's changed the
outlook for the developer to negative from stable.
    Meanwhile, President Donald Trump's revived threat of new
U.S. tariffs against China dampened risk appetite.
    The Abu Dhabi index dropped 3%, as the largest lender
First Abu Dhabi Bank lost 3.3%.
    Qatar's index slipped 0.9%, hurt by a 1.4% drop in
Qatar Islamic Bank.
    Outside the Gulf, Egypt's blue-chip index dropped
3.3%, with Commercial International Bank falling 2.3%.
    ** Bahrain was closed for a public holiday.
 SAUDI ARABIA          plunged 7.4% to 6,586 points
 ABU DHABI            declined 3% to 4,107 points
 DUBAI                  sank 4% to 1,946 points
 QATAR                eased 0.9% to 8,688 points
 EGYPT                  down 3.3% to 10,200 points
 OMAN                 was flat at 3,538 points
 KUWAIT               was down 2% at 5,248 points
 (Reporting by Ateeq Shariff in Bengaluru; Additional reporting
by Marwa Rashad;
Editing by Andrew Cawthorne)
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