DUBAI Jan 17 Saudi Arabia's stock market
plunged more than 6 percent early on Sunday in response to a
fresh tumble of oil and global equity prices, while Egypt's
market also continued to fall sharply.
The Saudi index was down 6.5 percent in the first 15
minutes of trade after Brent oil slumped more than 6 percent to
settle below $29 a barrel on Friday, capping a 13 percent
decline for the week.
Riyadh has been putting in place austerity policies designed
to stabilise government finances in an era of cheap oil, but
analysts believe its budget calculations were based on an
average oil price of about $40.
If oil stays at current levels, authorities could be
pressured into more spending cuts to reduce the red ink, slowing
economic growth further - and conceivably threatening a
That prospect caused 167 Saudi stocks to drop in early trade
while no stock rose. Petrochemical producer Saudi Basic
Industries sank 7.4 percent while miner Ma'aden
lost 7.1 percent.
Egypt's index slid 5.2 percent in a broad-based
sell-off as investment bank EFG Hermes tumbled 6.2
percent. Blue chip lender Commercial International Bank
plunged 7.7 percent.
Foreign investors have been heavy sellers of Egyptian stocks
during the emerging market rout of the last few days, causing
panic among local investors in Cairo.
(Reporting by Andrew Torchia; Editing by Gareth Jones)