Tadawul Review:

Tadawul All Share Index (TASI) exhibited increased volatility on Wednesday before closing up by 24 points (+0.2%) at 12,713 levels. The index opened at a positive gap to last close and touched a high of 229 points in the afternoon. Since then, the index lost 206 points as investors booked profits across the board. Overall, 8 of 20 sectors gained, and the advance to decline ratio was at 0.82. The Banking sector led the market higher adding 78 points to the index with SNB (+2.9%), SABB (+5.9%), and BSFR (+5.8%) being the major contributors. Red Sea International, Anaam Holding, and Saudi Industrial Export were the major gainers for the day with all of them recording a jump of 10%. Trading volumes and value declined by 6.9% and 9.9% to 191mn shares and SAR9.0bn.

Market Wrap International:

The greatest daily decline in US shares in almost two years impacted on mood, as Target's poor outlook cited growing costs and inflation, while European, U.K., and Canadian inflation hit multi-decade highs. Target's stock fell -24.9% in the worst day since the 1987 Black Monday meltdown, making it the second retailer in two days to lower its profit outlook, following Walmart on Tuesday. Fuel and freight costs rose sharply in the first quarter, while consumer spending slowed, causing a dramatic decline in fashion and home-goods sales, according to CEO Brian Cornell. The S&P500 fell -4.04%, with 98.4% of equities down. All sectors were down, with consumer discretionary down -6.60% and consumer staples down -6.38% leading the way.

European stocks also fell, interrupting a three-day winning streak, as inflation rose to its highest level in 40 years, albeit slightly below expectations. Inflation in the United Kingdom increased to +9% in April from +7% before, above expectations of +9.1%. In the Eurozone, headline inflation remained constant at +7.4% , somewhat lower than the forecasted +7.5%. Consumer staples -2.02% and consumer discretionary -2.0% pulled down the Euro Stoxx 600, while utilities +0.69% and energy +0.43% excelled. With weakening across the area, the DAX fell -1.26%, the CAC -1.20%, and the FTSE100 -1.07%.

Asian stock markets inched upwards as strong US economic data eased growth concerns while Chinese equities continued their descent.  SH Composite (-0.25%) failed to follow the upward trajectory mainly due to property shares pulling the index down as data showed a decline in new home prices for April and tech stocks losing steam ahead of Tencent earnings. Hong Kong’s, Hang Seng index managed to rise by 0.2% and Japan’s Nikkei 225 also rose by 0.9%. KOSPI closed upwards by 0.2% while SENSEX, in India, was down by -0.2%.