The Tadawul All-Share Index (TASI) dropped 4.96 percent or 463.07 points to 8,868.12 on Wednesday, its biggest daily fall in three months.

Analysts said the stock market plunged in a broad sell-off on concern about upcoming first-quarter earnings announcements, stretched valuations and the escalation of military conflict in Yemen.

The value of traded shares reached SR11.95 billion on Wednesday.

Basil Al-Ghalayini, CEO of BMG Financial Group, told Arab News: “There are several factors behind these consecutive drops to this new level. The new directive regarding the unbuilt lands’ tariff has triggered these drops on Tuesday coupled with the oil price fall on Wednesday, which has put even more downward pressure on most of the market sectors, especially the petrochemicals one.”

Obviously, he added: “The geopolitical risk in the south has added the nervousness factor among traders.”

John Sfakianakis, Middle East director at Ashmore Group, said: “The market sold off on Wednesday due to geopolitical concerns, a slight decline in oil prices, the Dow retreating by more than 100 points. What is interesting is that foreign investors didn't seem to be selling off from their positions whereas retail investors did react. Such volatility is to be expected given the flurry of news.”

The Cabinet decision about unutilized land had a major impact on real estate firms as their shares dropped sharply on Wednesday. The real estate development index tumbled over 9 percent to 7,601.53 points.

The benchmark had vastly outperformed other Gulf markets and was up 6.42 percent so far this year.

“We have been talking about expensive valuations for the last couple of weeks,” Reuters quoted Abdullah Alawi, assistant general manager and head of research at Aljazira Capital as saying. “But the drop was faster than expected.”

Other Gulf bourses also declined on Wednesday.