The Tadawul All-Share Index (TASI) plunged 4.4 percent, its biggest drop since Feb. 24, 2009, to end at 6,516.71 points.

"A devastatingly strong loss to start the week, with drops across all sectors. With no gaining sectors, losses ranged from 8.32 percent in insurance to a loss of 2.31 percent in energy and utilities," the Financial Transaction House (FTH) said.

The value of traded shares was high, reaching SR5.48 billion, with no companies posting any gains, making Saturday's market movement completely negative, except for Al-Ahlia Insurance Company, which saw no change.

There has been extraordinary turbulence across global markets in the last few days. Stock markets, many currencies and commodities all fell sharply and borrowing costs rose. Concern about the viability of the Greek bailout plan and the risk of a deeper debt crisis within the euro-zone was the main cause of the market's woes, compounded by an inconclusive result in parliamentary elections in Britain and problems with the electronic share trading system in the United States, the Riyadh-based Jadwa Investment said in its flash note on Saturday.

The petrochemicals index shed almost 6 percent to 6,152.13 points. The stocks of bellwether Saudi Basic Industries Corp (SABIC) fell 4.76 percent to close at SR100 on Saturday.

Commenting on the TASI plunge, Paul Gamble, head of research at Jadwa Investment, said: "This is more a reaction to the falls seen in the global stock market and the oil prices."

The Jadwa report said that every $1 per barrel decline in the oil price reduces the Kingdom's oil export revenue by around $3 billion over a 12-month period. Nonetheless, the current fall in oil prices is not a cause for concern. According to Jadwa, the 2010 budget is based on an oil price (WTI) of $51 per barrel, compared to an average for the year to date of $80.2 a barrel. The Kingdom therefore has an ample cushion even at Friday's price of $75.1. Moreover, at current oil prices, the Kingdom's petrochemical producers remain highly competitive.

"The fall in the TASI on Saturday again clearly illustrates that Saudi Arabia is not immune from problems elsewhere in the global economy. Nonetheless, the falls in global asset prices over the last few days do not alter forecasts for the TASI, oil prices or the Saudi economy. The fragility of the recovery and continuing vulnerabilities made setbacks to the recovery and global markets inevitable," Gamble said.

"Saudi Arabia is again caught up in global developments not directly affecting economic fundamentals in the Kingdom. Once this storm subsides, the Kingdom's economy and markets will resume their growth trajectory," he added.

John Sfakianakis, general manager and chief economist at Banque Saudi Fransi, said: "The negative sentiment in Saudi Arabia is predicated on what happened around the world which is no surprise. Saudi Arabia's stock market is significantly correlated to a drop in US equities, so when the S&P and the Dow plunge there is very little reason not to see the same in the Saudi stock market."

Gulf markets should witness similar drops as they begin their trading sessions on Sunday, he said.