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Saudi Arabia rejected threats to punish it over the disappearance of journalist Jamal Khashoggi in Istanbul, saying the kingdom would retaliate against any sanctions with tougher measures, the official state news agency said on Sunday.
The comments came after U.S. President Donald Trump threatened "severe punishment" for Riyadh if it turned out Khashoggi, a prominent critic of Saudi authorities and a legal resident of the United States, was killed in the Saudi consulate in Istanbul.
"The Kingdom affirms its total rejection of any threats and attempts to undermine it, whether by threatening to impose economic sanctions, using political pressures, or repeating false accusations..." the official Saudi Press Agency quoted an unnamed government source as saying.
"The Kingdom also affirms that if it receives any action, it will respond with greater action, and that the Kingdom's economy has an influential and vital role in the global economy..." the source added without elaborating.
The threat caused the stock market of the world's biggest oil exporter to lose as much as $33 billion of its value on Sunday in one of the first signs of the economic pain that Riyadh could suffer over the affair.
The Saudi equities index plunged as much as 7 percent in its biggest drop since December 2014, when oil prices were crashing. It later recovered partially to stand 5.0 percent lower shortly before the close.
Turkey believes Khashoggi was deliberately killed in the consulate and his body removed. Riyadh has rejected those claims.
A senior member of Saudi Arabia's ruling family, Prince Khaled al-Faisal, has met Turkey's President Tayyip Erdogan to discuss Khashoggi's disappearance, two sources with knowledge of the matter told Reuters without providing details of the talks.
On Friday, a source with links to the prince's family said Prince Khaled, who is the governor of Mecca, had been sent to Turkey in his capacity as special adviser to King Salman.
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Foreign capital is key to Saudi Arabia's plans to diversify its economy beyond oil and cut a 12.9 percent jobless rate among its citizens.
But in response to Khashoggi's disappearance, media firms and some technology executives have pulled out of a major Riyadh investment conference scheduled for next week.
"This is happening at a time when Saudi Arabia is preparing for a big investment event and they don’t need people suspending or pulling out investments," said Nadi Barghouti, head of asset management at Emirates Investment Bank in Dubai.
Trump has not described what punishment Saudi Arabia might face. He has indicated Washington does not want to harm close defence ties, saying the United States would be punishing itself if it halted sales of military equipment to Riyadh.
But U.S. senators have triggered a provision of the Global Magnitsky Human Rights Accountability Act requiring the president to determine whether a foreign person is responsible for a gross human rights violation. The act has in the past imposed visa bans and asset freezes on Russian officials.
Also, anti-Saudi sentiment in the U.S. Congress could conceivably raise pressure to pass the so-called No Oil Producing and Exporting Cartels Act, which would end sovereign immunity shielding OPEC members from U.S. legal action.
Past U.S. presidents have opposed the bill but the chances of it being passed may have increased because of Trump's frequent criticism of the Organization of the Petroleum Exporting Countries, which he accuses of driving up oil prices.
Meanwhile, there is concern Khashoggi's disappearance could add to a sense that Saudi policy has become more unpredictable under Crown Prince Mohammed bin Salman, who is pushing social reforms to modernise the kingdom but has also presided over a rise in tensions between Riyadh and several other countries.
A Gulf banker said the Khashoggi case, combined with other events, had become a significant factor for some potential investors in Saudi Arabia and that her bank was receiving many queries from foreign clients on how to interpret it.
"It’s cumulative – the Yemen war, the dispute with Qatar, the tensions with Canada and Germany, the arrests of women activists. They add up to an impression of impulsive policy-making, and that worries investors," the banker said.
Britain's main opposition Labour Party would stop selling arms to Saudi Arabia if it was in government, its foreign policy spokeswoman said on Sunday after the disappearance of Saudi journalist Jamal Khashoggi.Khashoggi entered the Saudi consulate in Istanbul on Oct. 2 to get documents for his forthcoming marriage. Saudi officials say he left shortly afterwards but Turkish officials and his fiancée, who was waiting outside, said he never came out.Turkish sources have told reporters the initial assessment of the police was that Khashoggi, an outspoken critic of the Saudi government, had been deliberately killed inside the consulate. Riyadh has dismissed the claims.Emily Thornberry, Labour's so-called shadow foreign minister, told the BBC's Andrew Marr show that "the balance of evidence" suggested Saudi Arabia had killed the journalist."We would stop selling arms to Saudi Arabia in current circumstances until they changed their ways ...We would be making it clear that we disagreed," she said."I think our country has had enough of this. I think we have to stand up to them and have to say that the current behaviour is unacceptable."Foreign minister Jeremy Hunt has called on Saudi Arabia to explain what happened to Khashoggi. Turkey expects Saudi cooperation on case of missing journalist: FMTrump says Saudi Arabia faces 'severe punishment' if Khashoggi was killedTurkey obtains recordings of Saudi journalist's purported killingIMF chief attending Saudi conference, watching for news of journalist
UK's Labour says it would stop selling arms to Saudi Arabia
Saudi Arabia's stock market plunged on Sunday as investors worried about deteriorating relations with the international community after the disappearance of Saudi journalist Jamal Khashoggi.After nearly two hours of trade the index was down 7.0 percent, its biggest drop since December 2014, when oil prices were crashing. Shares in the region's biggest petrochemical producer, Saudi Basic Industries, tumbled 7.9 percent."It’s the political environment. The market is reacting negatively to sentiment around the Khashoggi case and the political noise around it," said Salah Shamma, head of investment for the region at Franklin Templeton Emerging Markets Equity, a big global fund manager.Shamma noted the fundamental situation of the Saudi economy had not so far been affected.But regional traders said speculation the Khashoggi case might deter some inflows of foreign investment - and that a backlash in the U.S. Congress could lead to U.S. sanctions against some Saudi individuals - had triggered panic selling of stocks by some local investors."It seems that international accounts are punishing the Saudi exchange," a regional broker added.Turkey expects Saudi cooperation on case of missing journalist: FMKhashoggi, a prominent critic of Riyadh and a U.S. resident, disappeared on Oct. 2 after visiting the Saudi consulate in Istanbul. Turkey believes he was deliberately killed inside the building and his body removed. Riyadh has dismissed the claims.U.S. President Donald Trump said on Saturday there would be "severe punishment" for Saudi Arabia if it turned out that Khashoggi was killed in the consulate.Media companies and some technology executives have pulled out of a major Saudi investment conference scheduled for next week in Riyadh because of growing outrage over the disappearance.Other stock markets in the Gulf opened higher on Sunday but began falling as Riyadh plunged, with the Dubai index sinking 1.4 percent.Trump says US would be 'punishing itself' if it halts Saudi arms sales
Saudi stocks plunge 7 pct on Khashoggi fallout; biggest drop since 2014
U.S. President Donald Trump said on Saturday that the United States would be "punishing itself" if it halts military sales to Saudi Arabia, even if it is proven that Saudi journalist Jamal Khashoggi was killed inside the country's consulate in Istanbul.Khashoggi, a prominent critic of Riyadh and a U.S. resident, disappeared on Oct. 2 after visiting the consulate. Turkey's government believes he was deliberately killed inside the building and his body removed.Trump has forged closer ties with Saudi Arabia and is under international and domestic pressure to help determine what happened to Khashoggi and punish Saudi Arabia if investigations show its government had him killed.Some U.S. lawmakers have said Washington should block military sales to Riyadh if the allegations are proven. But Trump is opposed."I actually think we’d be punishing ourselves if we did that," Trump told reporters at the White House on Saturday."There are other things we can do that are very, very powerful, very strong and we’ll do them," he added, without saying what those measures might be.Trump says Saudi Arabia faces 'severe punishment' if Khashoggi was killedDisappearance of Khashoggi cannot be covered up: AK Party spoxUS congressmen seek support for Khashoggi intel release
Trump says US would be 'punishing itself' if it halts Saudi arms sales
Hatice Cengiz, fiancee of missing Saudi journalist Jamal Khashoggi, on Saturday called for accountability if he was killed.Khashoggi, a columnist for Washington Post, was last seen entering the Saudi Consulate in Istanbul on Oct. 2, and fears have grown that he has been killed.On Friday, several media outlets reported that Turkish authorities had audio and visual evidence that showed Khashoggi was killed inside the consulate.In an op-ed penned for The New York Times, Cengiz, a doctoral student in Istanbul, said that if the allegations proven true, Khashoggi "is already a martyr" and his loss was "of every person with a conscience and moral compass"."If we have already lost Jamal, then condemnation is not enough. The people who took him from us, irrespective of their political positions, must be held accountable and punished to the full extent of the law," she said.On the same day Khashoggi arrived at the consulate, 15 Saudis, including several officials, arrived in Istanbul on two planes and visited the consulate while Khashoggi was inside, Turkish police sources said. All of the identified individuals have since left Turkey.Saudi authorities have yet to give a clear explanation about Khashoggi’s fate, while several countries -- particularly Turkey, the U.S. and the U.K. -- have expressed their desire that the matter should be elucidated as soon as possible.On U.S. President Donald Trump's invitation to the White House, Cengiz said she would "consider accepting" such an invitation if Trump helped reveal what happened to Khashoggi."If he makes a genuine contribution to the efforts to reveal what happened inside the Saudi consulate in Istanbul that day, I will consider accepting his invitation," she wrote.Earlier, in a CBS interview on Saturday, Trump said that there would be "severe punishment" for Saudi Arabia if it turns out that Khashoggi was killed."Jamal spoke up against oppression, but he paid for the Saudi people’s demand for freedom with his own life," added Cengiz."If he is dead, and I hope that is not the case, thousands of Jamals will be born today, on his birthday. His voice and his ideas will reverberate, from Turkey to Saudi Arabia, and across the world. Oppression never lasts forever. Tyrants eventually pay for their sins," she wrote.Turkey expects Saudi cooperation on case of missing journalist: FMTrump says Saudi Arabia faces 'severe punishment' if Khashoggi was killedTurkey obtains recordings of Saudi journalist's purported killingIMF chief attending Saudi conference, watching for news of journalistTrump to call Saudi king to discuss missing journalist
Fiancee demands accountability if Khashoggi murdered