The National Commercial Bank’s (NCB) debut in the Saudi stock exchange is expected to create a positive sentiment, a senior analyst said as the Tadawul All-Share Index (TASI) closed 1.59 percent or 155.73 points lower at 9,628.84.

John Sfakianakis of Ashmore Group said: “The fall of the index over the last two days is mainly due to the Mobily issue and Brent approaching $ 80 price level is also weighing on sentiment.”

Shares in Saudi Arabia’s Mobily tumbled for a second day on Wednesday as investors dumped the stock after the telecommunications firm revised 18 months of prior profits and announced a shock third-quarter profit drop. Mobily’s shares fell 9.7 percent to SR65, taking its losses to 18.5 percent in two days since resuming trading.

The petrochemical industries index dropped over two percent on Wednesday to 7,168.05 points.

“Petchems are positively correlated to oil prices and because they are the second biggest weight on the TASI, a decline in petchems does have a negative impact on the index,” Sfakianakis said.

Oil prices jumped on Wednesday, with Brent rebounding from a four-year-low. Brent oil surged to above $ 84 a barrel from a 2010 low beneath $ 82, before returning to trade at around $83.

The US crude rose to above $79 a barrel, from a session low beneath $77, before consolidating above $78.

By 1656 GMT, Brent was up 59 cents at $83.32 a barrel while the US crude rose $1.05 to $78.24. The spread between the two oils was at around $ 5 a barrel, the widest in nearly a week.

Basil Al-Ghalayini, CEO of BMG Financial Group, told Arab News: “Clearly there are concerns in the Saudi business community on the latest decline in oil prices, especially with the thought that it may trigger lower budget figures for 2015. Having said that, amounts committed to mega projects will be intact in terms of budgets allocated. As for its impact on Tadawul, it will have a short-term affect only.”

“The stock market performance has recently mirrored closely the oil price dynamics. So, a further correction at first looks likely to bearish for sentiment,” a regional analyst said.

He, however, added: “Lower prices will begin to tighten the oil market with time. The key question is how soon. Right now, too early to meaningfully assess the economic impact. Will depend on scale and duration of the price correction.”

Commenting on Tadawul's decline, Tazeem Anwar, senior financial analyst at Zughaibi & Kabbani Financial Consultants, Jeddah, said: “Though, correlation between oil prices and world stock prices has proved to be a little over the past few years. Only Saudi Arabia shows such correlation to a greater extent. Tadawul's plunge in a couple of days can also be attributed to the news that Saudi Arabia cut its official prices for Crude oil.”

He added: “Whatever the intention behind this Saudi action, whether to increase export volume, deter development of alternative energy sources or reset other economic objectives, a short time curtailment in GDP growth can be expected.”

He said: “Perhaps, investors fear that this dramatic reduction in oil revenues will result in a significantly lower GDP growth rate.”

Dubai’s stocks also fell on Wednesday. The benchmark DFM General Index (DFMGI) dropped 3.3 percent, the most in three weeks, to 4,400.80 at the close. That’s the steepest slide among 93 gauges worldwide tracked by Bloomberg so far Wednesday.