Saudi shares retreat to hit two-month low

Riyadh: Saudi Arabia's shares slumped for a second day after oil dropped to a 2012 low on concern that Europe's debt crisis will worsen and after China's industrial growth unexpectedly slowed in April.

Saudi Basic Industries Corp., the world's largest petrochemicals maker known as Sabic, fell 2 per cent. Al-Rajhi Bank, the country's largest lender by market value, declined to the lowest intraday level since February. The Tadawul All Share Index lost 2.3 per cent to 7,059.1 in Riyadh, the lowest since February 25. The MSCI Emerging Markets Index retreated 1 per cent on Friday.

"The drop is definitely headline driven, as we've seen a correction in oil prices, and on top of that, there are resurfacing concerns about the Eurozone debt crisis," said Asim Bukhtiar, an equity analyst at Riyad Capital. "The correlation between Saudi's market and international markets is tightening. I expect the performance of the measure in the coming days to reflect what's happening internationally."

Sabic decreased to 97 riyals. Al Rajhi Bank dropped 2.3 per cent to 73.75 riyals.