Tadawul Review:

Tadawul All Share Index (TASI) strongly rebounded on the first day of the week following the recovery in oil prices as well as a positive rally in the international equity markets over the weekend. TASI rose by +1.8% to add 202 points closing at 11,513 levels. The market opened with a huge positive gap of 205 points and managed to sustain its positive momentum throughout the session. Volume traded improved by 8.0% to 155mn shares while value traded receded by 2.4% to SAR5.2bn. The market rally was broad-based with 19 of 20 sectors closing up while 196 of 214 shares gained. Banks (+1.9%), Materials (+2.6%), and Energy (+1.3%) cumulatively added 134 points while only the Real Estate sector (-0.8%) closed negative.

 

 

Market Wrap International:

The global equity indices may look to build on the nascent recovery seen in the previous week amid growing chatter of recession and likely Fed’s action plan on rate hike. Overall, next week promises to be a relatively light period for news flow and data release. In the U.S, a 5-5.5% recovery in major indices last week was based on the realignment of the investors' expectations regarding future interest rate path. The dramatic drop in the interest rate on important 2 and 10-year curve points has also attracted fresh interest in the market. That said, the market may look for early insight for June-22 inflation and the strength of economic activity. To this end, data points on Purchasing Manager’s Index and Home Price Index for May hold the key.

In Europe, inflation will continue to be a major interest area for investors with CPI data for June-22 to be released for Germany and Eurozone next week. The sustainability of recovery in the benchmark index based on valuation argument will be put to test next week. Overall, the recovery may prove to be short-lived given expectation of not-so-encouraging data on inflation and unemployment.

In Asia, markets may take a cue from last session’s performance and important data points on inflation for June-22, particularly in Japan. Positive sentiment in tech stocks and expectation of more pro-growth measures in China were the major drivers for last week in Asia and may have a follow-through impact in the upcoming week.