Saudi Arabian shares fell the most in two weeks after reports signaled the global economic recovery is faltering, damping investors' appetite for riskier assets and as oil declined. The stock benchmark Tadawul All Share Index lost 2.58 percent, the sharpest decline since Aug. 6, to 5,931.29 points at close Saturday. All 15 industry groups retreated. Saudi Basic Industries Corp. (SABIC) and Al Rajhi Bank sank more than 2 percent. SABIC retreated 3.6 percent to SR93, its lowest price since March 5. National Industrialization Co., the petrochemical company known as Tasnee, plunged 6 percent to SR35.9. Al Rajhi declined 2.9 percent to SR68. “Basically the market is reacting to the plunge in global equities and commodities,” said Fuad Aghabi, a director at Ajeej Capital in Riyadh. “Confidence levels are lower because of the ongoing global volatilities on fears of another US downturn and European debt woes.” More than $8 trillion has been erased from the value of global equities in the past four weeks on concern the US may enter a recession and as an intensifying European debt crisis evoked memories of late 2008, when credit markets froze after Lehman Brothers Holdings Inc. collapsed. “Concerns around growth in major economies have now firmly taken hold,” said Asim Bukhtiar, an equity analyst at Riyad Capital. “Investors may be reluctant to add new positions ahead of the Eid holidays.” “The market is reacting to negative signals coming from international markets as well as the weak economic performance in Europe and the US,” said Akef Al Tanbouz, head of asset management at The Investor Securities in Riyadh. The Saudi Arabian market will close on Aug. 27 for the Eid Al Fitr Islamic holiday and trading will resume on Sept. 3. The Standard & Poor's 500 Index of US stocks tumbled 5.9 percent and the Stoxx Europe 600 Index lost 6.3 percent over the previous two days. Reports showed jobless claims rose in the world's largest economy and Philadelphia-area manufacturing shrank by the most since 2009, while investors speculated that European banks lack sufficient capital. Europe are “dangerously close to recession.” JPMorgan Chase & Co. lowered estimates for the US, saying it may expand less than previously projected in the next two quarters as consumer sentiment drops and the housing market fails to gain momentum. Citigroup also cut its US projection.
