Investors sold Saudi Arabian stocks after an International Monetary Fund warning of slowing growth in the Middle East’s biggest economy tipped the equity index into a so-called death cross. Dubai’s shares also slumped.
The Tadawul All Share Index slid for a sixth day, closing 2.9 percent lower at 8,197.02, the weakest level in more than seven months. That dragged its 50-day moving average below the 200-day moving average, a signal to some investors that further declines are in store. Al Rajhi Bank’s 2.9 percent decrease was the biggest contributor to the loss. Dubai’s DFM General Index slipped 2.5 percent to the lowest close since April 13.
The Tadawul’s drop comes two months after Saudi Arabia opened its stock market to direct foreign investment for the first time to help diversify its economy away from oil. It puts into focus the deepening concern that King Salman is pushing ahead with a multi-billion dollar spending program at a time when crude, which accounts for 90 percent of government revenue, is trading near the lowest in six years.
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