Saudi stock market first to plunge on S&P downgrade

Telegraph (UK) ^ | 06 Aug 2011 3:24PM BST

[DeaconBenjamin]

Saudi Arabia's stock market dropped 5.46pc on Saturday as it became the first exchange to react to the historic US credit downgrade.

The Tadawul All-Shares Index closed down 350.43 points to 6,073.44 as all shares tumbled following a tumultous week for global markets which was capped by Standard & Poor's cutting the US credit rating over its $14.3 trillion deficit and debt.

"The S&P rating and problems in Europe... have scared investors," said financial analyst Abdulwahab Abu Dahesh.

The Saudi market was the first to react globally to the S&P statement late on Friday, with the start of the trading week in Saudi Arabia, while all other markets remained shut for the weekend.

Analysts expect markets in Asia and Europe to follow the Tadawul lower on Monday.

"Saudi shares have reacted to two events: sharp drops on Thursday in markets, especially oil, and the S&P cut of the US rating," economist Mohammed al-Omran told Al-Arabiya news channel.

Global oil prices fell sharply last week on fears of a slowdown in the US but recovered after better-than-expected jobs data on Friday.

Saudi Arabia sits on one-fifth of world oil reserves and is the largest exporter of crude oil.

[boomop1]

Black Monday coming here.

[FlingWingFlyer]

Barry and his ‘RATS are finding out that the real world doesn’t work like the “college” classroom. You can preach and teach bull**** all day long but when all is said and done, it’s still bull****.

[hosepipe]

When (and IF) America starts processing the oil sands and total methane production the Saudi market will crash...

All thats needed is for AMerica to take its shackles off..
To FREE capitalism even freer than its been for 75 years..
The BOOM can happen... a free AMerica can drive FREEDOM again world wide..

-OR- it can die a simpering death...

[Farmer Dean]

How bad do you think it will be Monday?I’m thinking down about 850 points.

[org.whodat]

That is bloody black Monday, the small boys are going to take a beating.

[DownInFlames]

At what point do the trading computers shutdown?

[rwh]

How I wish we had adults representing us in Washington.

[USFRIENDINVICTORIA]

While you're at it, keep your rabid envriofascists away from Canada's oil-sands. (Canada = # 2 in oil reserves; # 1 foreign oil supplier to the U.S.)

[djf]

I think after a ten percent swing...

[hinckley buzzard]

The US currently imp0rts 1.1 million barrels a day from Saudi. Within the next year or two that could easily be replaced by production from North Dakota alone. BTW according to the federal Energy Information Administration the US net imports of oil have dropped to 49%. If the a-holes in Washington would simply get out of the way, the market will solve the "foreign oil" problem in fairly short order, without costing the taxpayers a cent.

[LostInBayport]

How I wish we had adults representing us in Washington.

Me too. If we did, they would have passed Cut, Cap & Balance or perhaps the Mack 1% plan and avoided this.

I don't think the general public will blame the Tea Party for this...quite the opposite. But November 2012 seems an eternity away.

[VanDeKoik]

850?

That actually makes me feel better!

[EBH]

10% loss depending on time of day. If it is near close it won’t shut down. Early in the day...the clock will stop.

[CPO retired]

It’s so transparently obvious the extent to which the administration is helping Saudi Arabia by holding us back. They got their boy in the WH, and he’s doing a good job of protecting them. I think they know the this will end eventually though.

They are trying to buy time and US real estate for when this economy explodes in growth and freedom. I can see our economy taking off so fast it might have to have some brakes put on, once we get a business friendly administration.

[bert]

You need to learn to take a less Americacentric view. There is a big world and lots of oil customers out there

[boomop1]

They will apply circuit breakers, but that wont help it will be over a thousand.

[Farmer Dean]

That will be in the first 3 minutes,then they will close trading.

[shield]

America is the engine of the world...the stupids are clueless....

[southernnorthcarolina]

It's hard to get an accurate reading on financial markets' reaction to the downgrade based merely on the Saudi exchange. Are/were any other Mideast exchanges open Saturday? The Tel Aviv exchange is open Sunday, beginning, I believe, at 8:30 AM local time (1:30 AM EDT). Any others?

Are gold futures being traded anywhere at present?