Saudi Arabian shares managed to recover losses in the early trading Saturday even as US and European markets tumbled over the weekend and oil prices retreated as signs of slowing growth heightened concern fuel demand will weaken. The stock benchmark Tadawul All Share Index closed 0.07 higher to 6,116.71 points. "The Saudi market is responding to declines on the international markets over the weekend," said Asim Bukhtiar, an equity analyst at Riyad Capital. "Petrochemicals are repricing on declines in crude to below $80 on strengthening US dollar and eroding demand outlook." "The Saudi market is slightly falling driven by petrochemicals, cement and industrial investment shares," said Turki Fadaak, head of research at Riyadh-based Albilad Investment Co. "The market may rise before closing today as liquidity is increasing." "Bank shares are dropping on concerns over potential Europe exposure by way of investments in sovereign debt and corporate credit," he added. US and European stocks fell over the Saudi weekend. The Standard & Poor's 500 Index slumped 3.7 percent in the past three days, capping a quarterly loss of 14 percent, the worst drop since the three months ending December 2008. The Stoxx 600 Europe Index declined 1.6 percent since Sept. 27. Crude oil for November delivery fell $2.94 to $79.20 a barrel on the New York Mercantile Exchange yesterday, the lowest settlement since Sept. 29, 2010. Futures dropped 11 percent this month, the biggest decline since May 2010, and lost 6.2 percent in the past three days. Saudi Arabia, holder of 20 percent of the world's proven oil reserves, depends on oil for 86 percent of its revenue. A gauge of manufacturing in China, the world's fastest- growing oil consumer, shrank yesterday for a third month, the longest contraction since 2009. Consumer spending in the US slowed in August, with purchases rising 0.2 percent after a 0.7 percent increase the prior month. German retail sales slumped 2.9 percent from July.
