US jobs news hits Tadawul

Markets Update: The Saudi Tadawul closed [2.5 per cent] down yesterday as retail investors dumped out of speculative stocks after grim jobs data from the United States cast doubt on the speed of the recovery of the world's biggest economy.

The Tadawul declined 1.84% yesterday. Waseem Obaidi / Bloomberg News

The Saudi Tadawul All-Share Index closed down yesterday as retail investors dumped speculative stocks after grim jobs data from the United States cast doubt on the speed of the recovery of the world's biggest economy.

US employers added 120,000 jobs in March, the smallest increase in five months and less than expected, according to official data on Friday. The Saudi index showed some reaction to the data on Saturday, closing down 0.42 per cent. On the first day of the trading week for the rest of the region, the Tadawul fell a further 1.84 per cent to 7,717.72 as retail investors took flight.

"The weak payrolls data from the US set a negative tone and is an excuse for retail investors who have benefited from the 25 per cent rally on the Tadawul so far this year to take some profits," said Saleem Khokhar, the head of equities at National Bank of Abu Dhabi.

A drop in the index offers investors who missed out on this year's rally so far in Saudi equities another chance, said Mr Khokhar, who expects the index to rise after a short contraction.

"It's a very good buying opportunity to get into the country at lower levels, especially if it were to fall another couple of per cent."

However, UAE markets were likely to suffer in the coming session as investors took their lead from Saudi Arabia, he said.

The Abu Dhabi Securities Exchange General Index closed down 0.03 per cent at 2,558.14. The Dubai Financial Market General Index ended the day down 1.06 per cent to 1,668.62. The Nasdaq Dubai closed at 1,714.390, down 0.58 per cent.