Saudi Arabia rejects Trump's threats of punishment over Khashoggi row as its market tanks 6.8%

REUTERS/Fahad Shadeed

A Saudi trader monitors stocks at the Saudi Investment Bank in Riyadh August 9, 2011.

• The Saudi stock market has dropped more than 6.8 percent after President Donald Trump threatened "severe punishment" over the disappearance of Washington Post columnist Jamal Khashoggi.
• The drop in the Tadawul exchange in Riyadh happened Sunday, the first day of trading.
• Saudi Arabia has responded that it rejects any "threats" of economic sanctions or political pressure.
• Turkish officials say they fear Saudi agents killed Khashoggi after he entered the Saudi Consulate in Istanbul on Oct. 2. The kingdom has called the allegations "baseless."

The Saudi stock market has dropped more than 6.8 percent after President Donald Trump threatened "severe punishment" over the disappearance of Washington Post columnist Jamal Khashoggi as its governement hit back at the US.

The drop in the Tadawul exchange in Riyadh happened Sunday, the first day of trading. "The Kingdom as the government and people are steadfast, glorious as ever, no matter whatever the pressures and circumstances might be," a press release from Saudi Arabia after the drop.

Saudi Arabia says it rejects any "threats" of economic sanctions or political pressure after Trump's comments on the disappearance of Khashoggi, adding that if it "receives any action, it will respond with greater action."

US Senators and prominent pundits have called for Trump to sanction or stop arms sales to the Kingdom.

Trump has expressed reluctance to stop selling arms, citing a $110 billion defense deal he worked out with the Kingdom as good for the economy, but told CBS' "60 Minutes" that on Sunday "We're going to get to the bottom of it and there will be severe punishment."

Turkish officials say they fear Saudi agents killed Khashoggi after he entered the Saudi Consulate in Istanbul on Oct. 2. The kingdom has called the allegations "baseless," but has offered no evidence the writer ever left the consulate.

Trump's close Saudi ties are attracting attention as pressure mounts from Congress to find out if Khashoggi was killed in a Saudi consulate in Turkey, as Turkish officials say.

Trump said Friday he'll soon speak with Saudi Arabia's king about Khashoggi's disappearance.