Saudi Arabia’s main equities index was down 2.0% on Tuesday after the government announced drones had attacked oil pumping stations in the Riyadh region.
The index was trading at 8,204.63 points at 1103 GMT.
The market had opened higher after two days of heavy losses.
In a related development, the oil prices also marked a 1.5% increase after the confirmation of the attack.
Yemeni forces announced on Tuesday that they have carried out a wide-scale operation against Saudi targets.