PHOTO
* Saudi index at lowest close since Jan. 21
* Petrochemical stocks hit by oil price disappointment
* Austerity threatens shares favoured by retail investors
* Some telcos, utilities outperform as defensive stocks
* Egypt's Kabo surges after annual earnings
By Andrew Torchia
DUBAI, Sept 28 (Reuters) - Saudi Arabia's stock market fell sharply for a second straight day on Wednesday, leading the entire region down, in response to weak oil prices and government austerity measures.
The Saudi equities index
.TASI
, which had retreated 3.8 percent on Tuesday, sank a further 3.4 percent to 5,534 points, its lowest finish since Jan. 21. It has tumbled 19.5 percent from a peak in April.
Trading volume climbed to a two-month high as the index fell below technical support on the February low of 5,551 points, though it closed off its intra-day low. It has stronger support at the January low of 5,349 points.
Brent oil futures
LCOc1
had fallen about 3 percent to around $46 a barrel on Tuesday after Iran rejected an offer from Saudi Arabia to limit its oil output in exchange for Riyadh cutting supply.
urn:newsml:reuters.com:*:nL3N1C4025
This hit petrochemical stocks, with Saudi Basic Industries
2010.SE
sliding 4.0 percent on Wednesday. PetroRabigh
2380.SE
outperformed the sector, dropping only 2.1 percent, after saying it would proceed eventually with a rights issue that has been delayed since 2015.
The Saudi insurance sector also suffered after the government said this week that it would reduce bonuses and perks for public sector workers; insurance stocks are favoured by local retail investors, who will have less disposable income because of the austerity drive.
"In Saudi Arabia it is very common to see an average public sector employee trading in the stock market, because someone from his family once made a fat profit - but those days are long gone now. They simply won't have the financial flexibility with these austerity moves," said a Jeddah-based broker.
Among other stocks directly exposed to consumer sentiment, travel agent Al Tayyar
1810.SE
plunged 8.2 percent.
Some telecommunications firms and utilities, seen as defensive shares, performed relatively well and Zain Saudi
7030.SE
was one of only four rising stocks, gaining 3.1 percent.
Elsewhere in the Gulf, Dubai's index
.DFMGI
fell 0.4 percent in thin trade as Emaar Properties
EMAR.DU
lost 1.0 percent. Abu Dhabi
.ADI
dropped 0.5 percent with another real estate firm, Aldar Properties
ALDR.AD
, falling 1.5 percent.
Qatar
.QSI
edged down only 0.1 percent, supported by a 1.2 percent gain by Industries Qatar
IQCD.QA
.
In Egypt, the index
.EGX30
dropped 0.5 percent in a broad-based decline. But textile producer Kabo
KABO.CA
jumped 10 percent in its highest trading volume since January after posting a 14 percent rise in net profit for the year to June 30.
WEDNESDAY'S HIGHLIGHTS
SAUDI ARABIA
* The index
.TASI
sank 3.4 percent to 5,534 points.
DUBAI
* The index
.DFMGI
fell 0.4 percent to 3,453 points.
ABU DHABI
* The index
.ADI
dropped 0.5 percent to 4,449 points.
EGYPT
* The index
.EGX30
fell 0.5 percent to 7,908 points.
QATAR
* The index
.QSI
edged down 0.1 percent to 10,465 points.
KUWAIT
* The index
.KWSE
fell 0.2 percent to 5,402 points.
OMAN
* The index
.MSI
slipped 0.4 percent to 5,726 points.
BAHRAIN
* The index
.BAX
edged up 0.2 percent to 1,142 points. (Editing by Keith Weir) ((andrew.torchia@thomsonreuters.com; +9715 6681 7277; Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))
* Petrochemical stocks hit by oil price disappointment
* Austerity threatens shares favoured by retail investors
* Some telcos, utilities outperform as defensive stocks
* Egypt's Kabo surges after annual earnings
By Andrew Torchia
DUBAI, Sept 28 (Reuters) - Saudi Arabia's stock market fell sharply for a second straight day on Wednesday, leading the entire region down, in response to weak oil prices and government austerity measures.
The Saudi equities index
Trading volume climbed to a two-month high as the index fell below technical support on the February low of 5,551 points, though it closed off its intra-day low. It has stronger support at the January low of 5,349 points.
Brent oil futures
This hit petrochemical stocks, with Saudi Basic Industries
The Saudi insurance sector also suffered after the government said this week that it would reduce bonuses and perks for public sector workers; insurance stocks are favoured by local retail investors, who will have less disposable income because of the austerity drive.
"In Saudi Arabia it is very common to see an average public sector employee trading in the stock market, because someone from his family once made a fat profit - but those days are long gone now. They simply won't have the financial flexibility with these austerity moves," said a Jeddah-based broker.
Among other stocks directly exposed to consumer sentiment, travel agent Al Tayyar
Some telecommunications firms and utilities, seen as defensive shares, performed relatively well and Zain Saudi
Elsewhere in the Gulf, Dubai's index
Qatar
In Egypt, the index
WEDNESDAY'S HIGHLIGHTS
SAUDI ARABIA
* The index
DUBAI
* The index
ABU DHABI
* The index
EGYPT
* The index
QATAR
* The index
KUWAIT
* The index
OMAN
* The index
BAHRAIN
* The index