Tadawul Review:

Tadawul All Share Index (TASI) broke its two-day losing streak by adding 129 points (+1.2%) to close at 11,292 levels. The session was marred with extreme volatility and weak volumes. Trading activity hit low levels not seen in 2+ years with volume traded dropping to 107mn shares. Value traded was down 15.1% DoD to SAR3.6bn. Overall, 13 out of 20 sectors rose with Banks (+1.5%), Energy(+1.9%), and Materials (+0.9%) sectors taking charge. The advance to decline ratio was also a healthy 2.8x. Index heavyweights namely ARAMCO (+1.9%), SNB (+2.0%), and Al Rajhi (+1.0%) contributed the most to the index gains while Anaam Holding and Saudi Industrial Export were the top gainers for the day closing at their upper circuit. Investors remain cautious as evident from the absence of volumes as half-year results start coming in.

 

Market Wrap International:

The global equity markets are set to see sideways moves in the upcoming sessions. Macro news flow on inflation, economy data and policy rate decisions by ECB will remain major drivers of market performance. Earnings season for June-end quarter is also set to accelerate and will add to market’s volatility. In the U.S, the latest statements from the Fed’s official has eased investors’ concerns. The yield on the 10-yr bond has slipped below 3% market while the inversion of the yield curve has further deepened. The equity indices closed the last week on positive footing and may carry the momentum into next week.

In Europe, the upcoming ECB meeting of ECB on Thursday remains a major highlight of the week along with the CPI data in the U.K. ECB is set to raise policy rate for the first time since 2011. Political development in Italy and its impact on sovereign bond yield will also be a closely tracked area for the next week.

In Asia, the investor will likely draw comfort from the latest statement from the Chinese central bank suggesting the possibility of fresh monetary measures to support the growth in coming days. In addition, Asian markets are yet to show the reaction to the statement from Fed’s officials last week which appeared after the market close.