Saudi stocks dove seven percent in early trading on Sunday as the oil-rich kingdom comes under increasing international pressure over the disappearance of journalist Jamal Khashoggi.
The Tadawul All-Shares Index (TASI) quickly lost more than 500 points on the first trading day of the week, wiping out all the gains it had made since the start of the year.
The index had already dropped three percent on Thursday, following a rout on world stock markets fuelled by worries about higher interest rates and US President Donald Trump‘s attacks on the Federal Reserve.
The TASI was trading at just above 7,000 points, a 10-month low, having reversed the entirety of the 18-percent gain it had notched since the start of 2018.
All 15 sectors in the market were in the red while almost all listed shares dropped.
In just two sessions the Saudi bourse, the largest in the Arab world, has shed almost $50bn of its capitalisation, which now stands at around $450bn.
Mohammed Zidan, market strategist at Thinkmarket in Dubai, said the drop in Saudi stocks was the result of panicked selling because of several political and economic factors.
“There has been a kind of uncertainty surrounding the situation of the disappearance of Khashoggi which has caused the market to fall,” Zidan told the AFP news agency.
Trump threatened Riyadh on Saturday with “severe punishment” if Khashoggi, a contributor for the Washington Post who has been critical of Crown Prince Mohammed bin Salman, was killed inside its Istanbul consulate.
With the mystery over Khashoggi unresolved after he failed to reappear after walking into the consulate on October 2, a pro-government Turkish daily said the Saudi national had recorded his own interrogation inside the mission on an Apple Watch.
Investors, journalists and politicians have announced plans to boycott an important investment conference in Saudi Arabia.