(Bloomberg) — Saudi Arabian equities dropped the most in almost ten months on Sunday as a global metals selloff hit local miners and speculation intensified over the possibility of military attacks involving the US, Iran and Israel.
The Tadawul All Share Index slid 1.9% in Riyadh, its biggest drop on a closing basis since April. Materials producers including Saudi Arabian Mining Co. led the declines after a rally in the dollar late last week accelerated a plunge in precious metals prices. Gold on Friday saw its biggest slide in four decades, while silver tumbled.
Capital goods firms, developers and energy companies also suffered, with geopolitical tensions a primary concern. Elsewhere in the region, equities in Bahrain, Kuwait and Qatar advanced.
“The decline in Saudi is understandable due to geopolitics as well as profit booking,” said Junaid Ansari, head of research and strategy at Kamco Investment Co. “Mining shares are also down due to the gold crash.”
Iran’s Supreme Leader Ayatollah Ali Khamenei on Sunday warned of a “regional war” as tensions continued to mount over potential US strikes on Tehran. Fears of a such a strike have grown after President Donald Trump ordered US Navy vessels to the Middle East in January following Iran’s deadly crackdown on protesters.
While Trump said on Friday he’d persuaded Tehran to delay executing demonstrators, local media reported several incidents near Iran’s southern waters in recent days, fanning concerns around heightened tension in the region.
The stock losses on Sunday followed the Saudi benchmark’s best monthly performance since 2022 in January.
The drop also comes on what may otherwise have been a positive day for the market; as of Feb. 1, non-Saudis can invest directly in Saudi Arabian stocks. That ends years of limited access and rules that investors needed to meet specific criteria, such as having $500 million in assets under management.
(Updates with closing levels and day’s movers starting in second paragraph)
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