The Saudi equities index.TASI was down 1.0 percent after 25 minutes of trade as declining stocks overwhelmed advancers by 155 to 15.
Investment firm Kingdom Holding (4280.SE), owned by billionaire Prince Alwaleed bin Talal, who was one of those detained, plunged 9.9 percent.
Shares in National Industrialization Co (Tasnee) 2060.SE, in which Kingdom holds a 6.2 percent stake, fell 1.3 percent and Banque Saudi Fransi (1050.SE), in which Kingdom bought a 16.2 percent stake in September, sank 2.8 percent.
However, much of the market escaped panic selling and some blue chips were little changed, with top petrochemical producer Saudi Basic Industries (2010.SE) down only 0.2 percent.
Saudi-owned Al Arabiya television reported a new anti-corruption committee chaired by Prince Mohammed had detained 11 princes, four current ministers and tens of former ministers, as well as several senior businessmen.
Analysts said the news worried the stock market because businessmen implicated in the probe might end up having to sell some of their equity holdings, which could temporarily at least weaken prices. New investment in the market by the businessmen could shrink.
However, they said local investors might ultimately welcome the prospect of Prince Mohammed increasing his power and reducing uncertainty about his authority. Economic reforms such as privatisation and development projects could potentially now move faster.
US President Donald Trump also called on Saudi Arabia to consider going public with ARAMCO at the New York Stock exchange as other markets, including London and Tokyo, compete for the lucrative IPO.
In a tweet posted on Saturday, Trump said: "Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock exchange. Important to the United States."
Elsewhere in the Gulf, Dubai’s stock market fell 0.9 percent as the most heavily traded stock, Deyaar Development DEYR.DU lost 1.9 percent.
Qatar’s stock index.QSI dropped 0.6 percent in a broad-based decline, with nine of the 10 most active stocks weaker.