Saudi shares fall after kingdom announces record deficit

Saudi Arabia's Aramco will invest $7 bn in a Malaysia oil refinery project (AFP Photo/MARWAN NAAMANI)

Riyadh (AFP) - Saudi shares fell sharply at the start of trading Tuesday a day after the oil-rich kingdom announced a record $98 billion deficit but rallied by closing.

The Tadawul All-Shares Index (TASI) fell by 3.1 percent minutes after opening but recovered slightly to close down 0.9 percent at 6,930.60 points.

The market losses were led by the key petrochemical sector, which had shed 3.8 percent at the close.

TASI and other Gulf bourses have witnessed sharp volatility throughout 2015 mainly due to the slump in oil prices that led to spending cuts by regional governments and hit corporate profits.

Saudi Arabia said on Monday it posted a deficit of $98 billion (89 billion euros) in 2015 after a steep decline in oil revenues.

The kingdom also projected a deficit of $87 billion for 2016, the third year in a row with a shortfall.

To counter the impact of sliding oil revenues, the world's top crude exporter said it was applying unprecedented cuts to public subsidies on fuel, power and water.

Other Gulf markets were mixed at close on Tuesday.

Dubai rose 0.5 percent, Abu Dhabi was up 1.0 percent, while Qatar closed unchanged.

Kuwait dropped 0.8 percent, Oman fell 0.2 percent and Bahrain 0.16 percent.

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