Sunday's decline extended a losing spree for Saudi stocks, which in recent weeks have been hit by expensive valuations, weak oil prices and concerns about the economic outlook.
The drone attacks were carried out by Yemen's Houthi group, its military spokesman said on Al Masirah TV.
The index has lost all its gains this year and is down about 18% from its 2019 high of 9,403 points seen in early May.
On Sunday, the index was down 1.8% year-to-date.
The index's earlier gains were fueled by Saudi Arabia's entry into the MSCI and FTSE Russell's emerging market indices.
"There is no real positive news on the horizon with the index inclusion story over," said Muhammad Faisal Potrik, head of research at Riyad Capital.
"The market was expensive versus the region and other emerging markets, plus second-quarter earnings were not good."
Other Gulf markets also reacted negatively to the attacks, with Kuwait's premier index <.BKP> down 1.1% and Dubai stocks <.DFMGI> falling 0.8%.
"Sentiment is negative because of yesterday’s attacks on Aramco facilities. But this is temporary and the market will pick up towards the end of the day," said a trader in Riyadh, who asked not to be identified.
Saudi Basic Industries, the kingdom's biggest petrochemicals firm, was down 3.3% after it said it had curtailed feedback supplies by about 49% following the attack.
Other petrochemical companies such as Yanbu National Petrochemicals Co and Kayan also announced significant reductions in feedstock supplies.
The attacks come at a bad time for Saudi Arabia, which is preparing for the listing of oil giant Saudi Aramco on the Tadawul bourse in Riyadh later this year.
The attacks are unlikely to change plans for Aramco’s long-awaited initial public offering but may affect the valuation, risk consultancy Eurasia Group said in a note.
"The latest attack on Aramco facilities will have only a limited impact on interest in Aramco shares as the first stage of the IPO will be local. The international component of the sale would be more sensitive to geopolitical risks," it said.
Aramco has hired nine banks as joint global coordinators to lead its IPO, slated to be the world's largest, Reuters reported, citing two sources.
(Additional reporting by Marwa Rashad in Riyadh and Dmitry Zhdannikov in London; Editing by Dale Hudson)
By Saeed Azhar