Tadawul Review:

Tadawul All Share Index (TASI) underwent a volatile session of trading and ended up losing 58 points (-0.5%) to close at 11,465 levels. The market, since the beginning, was subjected to wild swings, despite starting with a positive gap of 67 points it managed to hit its low of -72 points by mid-day. Bargain hunters stepped in to elevate the index again, however, the recovery was short-lived as the TASI lost steam during the last hour of trading shedding 88 points. The majority of sectors closed lower and the advance to decline ratio stood at just 0.52x. Banks (-1.1%), Real Estate (-1.0%), and Energy (-0.4%) led the index decline while Materials (+0.5%) and Telecom (+0.2%) provided some support. Saudi Enaya was the top gainer for the day increasing by 10.0%. The trading activity remained muted with volume and value dropping by 30% and 40% to 124mn shares and SAR3.9bn. Going forward, TASI is likely to remain volatile with weak volumes given uncertainty over global economic health as well as the upcoming Eid holidays.  

 

 

Market Wrap International:

The global equity indices are set to trade a cautious path next week as the market enters into a month where Fed and ECB have to give verdict on the interest rate hikes. Market data, however, points to a more nervous reaction with bonds rallying in the U.S and yields on German bonds rising despite assurance from the ECB. That said, investors will also eye the upcoming results for the June-end quarter over the next few sessions for clues about possible slow-down and the impact of commodity price hikes. In the U.S, the payroll data will dominate the proceedings in a week shortened by a national holiday on the 4th of July. The S&P 500 closed last week on a high note and is expected to sustain the recovery momentum when the markets open next week.

In Europe, valuation appeal has provided much-needed support to stocks. ECB’s latest announcement on the introduction of new monetary tools has also weighed in. Overall, the stocks may look to consolidate at current levels following volatile past sessions.

 

In Asia, focus on China for possible economic support measures will continue. Moreover, the data on CPI in China is due next for June-22 which will also highlight the impact of COVID-19 restrictions in select cities. The tech-heavy indices are likely to see a relief rally given a strong reaction in the proceeding sessions.