Saudi Arabia's stock market dropped moderately in early trade Monday after oil producers meeting in Doha on Sunday caused crude prices to tumble, although some stocks rose on the back of better-than-expected earnings. Brent futures are trading at $41.15 per barrel, down 4.6 percent from their last settlement. The failure of the Doha meeting to agree on an oil output freeze may not make a huge difference to prices in the long term - analysts thought a freeze would have had only a minor impact on market conditions. But the talks' failure dealt a blow to sentiment in the oil market, with which Gulf bourses have been closely correlated over the past six months. The Saudi stock index was down 1.3 percent after 45 minutes of trade. Shares in petrochemical producers were particularly hard hit, with the sector's sub-index shedding 2.2 percent. The second largest listed producer, Saudi Arabia Fertilisers Co (SAFCO), slumped 4.6 percent after the company reported a 51.5 percent decline in net profit to 286 million riyals ($76.3 million). Analysts had expected the unit of Saudi Basic Industries to make 314.6 million riyals. A note by Riyadh-based NCB Capital said it was the lowest quarterly result since 2006, citing a decline in urea prices, a hike in natural gas feedstock prices and lower-than-expected operating rates. But shares in fellow petrochemical producer National Industrialisation Co (Tasnee) rose 2.0 percent after the company posted a narrower first-quarter net loss of 94.8 million riyals compared to a loss of 332.5 million riyals in the prior-year period, beating analysts' forecasts of a 272.9 million riyal loss. Another commodity producer, Saudi Arabian Mining Co (Ma'aden), climbed 2.1 percent after it reported a 35.3 percent fall in first-quarter net profit to 168.9 million riyals versus analysts' average estimate of just 1.13 million riyals. Saudi banking sector earnings have mostly been above analysts' expectations, and Arab National Bank, one of last in the sector to report first-quarter earnings, also came ahead of forecasts. Shares in the lender rose 0.3 percent after it posted a first-quarter net profit of 749.2 million riyals, a 2.8 percent drop. Analysts polled by Reuters had forecast on average 685.8 million riyals. Source: Reuters
