Saudi stocks declined to the lowest in three months, leading a drop in Gulf stocks, as oil fell for a seventh day and European shares slid after Germany introduced trading restrictions, sparking concern regulation will increase. The benchmark Tadawul All Share Index lost 2.38 percent to 6,401.06, the lowest since Feb. 16 and taking its losses to 7.6 percent since late-April's 18-month high. Saudi Basic Industries Corp (SABIC), the world's biggest chemicals maker by market, slumped the most since August. SABIC fell 5.4 percent, its biggest decline since Aug. 17 to slump to a 10-week low to SR92.25. Rabigh Refining and Petrochemical Co lost 3.3 percent. Saudi Arabian Fertilizer Co. lost 3.4 percent. Safco, a unit of SABIC, fell to SR128 and the Tadawul All Share Petrochemical Industries Index retreated 4.7 percent. “The main theme driving the market down is oil after it broke below $70,” said Youssef Kassantini, an independent financial analyst. “The market was due for a correction after rising significantly since March 2009.” “We're also coming up to the school exam period and once this is over by about mid-June, families will leave on vacation, while globally May is known to usually be a negative month, so there are seasonal factors at play as well,” he said. Oil fell on concern US gasoline demand is slowing and speculation the European debt crisis will worsen. Oil retreated as much as 2.2 percent to $67.90 a barrel, the lowest intraday level since Sept. 30. Saudi Arabia holds about 21 percent of the world's proven oil reserves. The “decline in global markets and oil” are pushing stocks lower, said Mohamed Dwaikat, senior broker at Al Fajer Securities in Abu Dhabi. “Investors are scared and are staying away from buying any shares.” Dubai's index DFM slumped to a 10-week low as traders exited in the wake of a worldwide equity sell-off. The benchmark dropped 1.7 percent to 1,686 points, its lowest close since March 11. Volumes slumped to a two-week low, so selling pressure is not extreme, but a lack of buyers is weighing on the market. “Markets are falling mostly on concerns about the second tier consequences of euro weakness and lower levels of demand for Middle East products,” said Zahed Chowdhury of Al Mal Capital. This essentially means energy and petrochemical products, but a declining euro could also be negative for the regional property sector. “A good chunk of demand comes from the euro zone,” he said. Abu Dhabi's benchmark ADI fell 0.5 percent to 2,775 points. Aldar Properties dropped 5 percent. Dana Gas was the most active stock. “If the oil dispute between Kurdistan and Iraqi central government is resolved, which seems very likely this year, this will be a strong driver for the share price,” said Hatem Alaa, senior analyst at HC securities. Kuwait's index KWSE fell 0.7 percent to 7,075 points. Gulf Finance House plunged 8.3 percent to its lowest level for more than two years on renewed concerns over the firm's viability. Qatar's index dropped 2.3 percent to 7,085 points, its biggest decline since Dec. 1. Industries Qatar slid 3 percent and Commercial Bank of Qatar lost 3.3 percent. Oman's index fell 1.3 percent to 6,510 points, its lowest finish since Feb. 8. Bank Muscat dropped 2.5 percent and Bank Sohar dipped 3.4 percent.
