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Saudi, Gulf stocks fall after attacks on Aramco oil plants

File photo. Photograph:( Reuters )

Reuters Dubai Sep 15, 2019, 06.41 PM (IST)

Saudi stocks fell sharply on Sunday, after attacks on two plants at the heart of the kingdom's oil industry a day earlier knocked out more than half of Saudi crude output.

Sunday's decline extended a losing spree for Saudi stocks, which in recent weeks have been hit by expensive valuations, weak oil prices and concerns about the economic outlook.

The drone attacks were carried out by Yemen's Houthi group, its military spokesman said on Al Masirah TV.

The index .TASI opened down 2.3% but later pared some losses.

At 0914 GMT, the Saudi market was down 1.3%. The index has lost all its gains this year and is down about 18% from its 2019 high of 9,403 points seen in early May.

"The stock market has been affected, especially the petchem sector," said Mazen al-Sudairi, head of research at Al Rajhi Capital, adding that the efficiency of some major companies in the sector will be at about 50% in the coming ten days.

Saudi Basic Industries (SABIC) 2010.SE, the kingdom's biggest petrochemicals firm, was down 2.4% after it said it had curtailed feedback supplies by about 49% following the attacks.

The attacks come at a bad time for Saudi Arabia, which is preparing for the listing of oil giant Saudi Aramco on the Tadawul bourse in Riyadh later this year.

The attacks however are unlikely to change plans for Aramco's long-awaited initial public offering, al-Sudairi said.

"What hurts Aramco hurts the global economy and the global source of energy... the world won't accept this threat to Aramco and with no saying Saudi Arabia won't allow it."

Story highlights

The attacks come at a bad time for Saudi Arabia, which is preparing for the listing of oil giant Saudi Aramco on the Tadawul bourse in Riyadh later this year.