Shares in Saudi Arabia fell on Sunday, dragging down UAE and regional stocks, following the kingdom’s sovereign debt downgrade.
The ratings agency Standard & Poors said on Friday that it was cutting Saudi Arabia’s long-tern sovereign debt rating to A+ from AA-, pointing the finger at the kingdom’s widening budget deficit because of lower oil prices.
The Tadawul All Share Index ended the day down 1.1 per cent at 7,045.77, its lowest close since March 2013, with Saudi Telecom and Alinma Bank shedding more than 4 per cent.
“We’re seeing the impact of poor corporate earnings and the S&P downgrade driving prices lower,” said Tariq Qaqish, the head of asset management at Al Mal Capital in Dubai.
The knock-on impact of the Saudi downgrade was felt most strongly in Dubai, where shares on Sunday suffered their worst one-day fall in two months.
The Dubai Financial Market General Index closed 2 per cent lower at 3,430.93.
Arabtec Holding and Gulf Navigation took the hardest hits, both shedding more than 4 per cent, while Emaar Properties closed down 3.8 per cent at Dh6.20.
Shares in Abu Dhabi were less affected, closing down 0.5 per cent at 4,298.72.
jeverington@thenational.ae
Follow The National's Business section on Twitter