Tadawul Review:

Tadawul All Share Index (TASI) fell for the second consecutive day losing 127 points (-1.1%) to close at 11.163 levels, which is the market’s lowest closing since 27th December 2021. The market slipped from the get-go, touching a low of 193 points, however, massive buying was witnessed during the closing auction helping the index to pare some losses. The usual suspects namely Banks (-1.2%), Materials (-2.6%), and Energy (-1.1%) sectors cumulatively pulled the index down by 101 points. ARAMCO (-1.1%), Al Rajhi (-1.0%), and SIPCHEM (-8.0%) put the most pressure on the index. Trading activity remained dry with volumes dropping by 10.5% to 121mn shares while value traded decreased by 15.1% to SAR4.3bn. Overall, uncertainty prevails over the global macroeconomic situation, however, Brent oil has posted a recovery of 6.8% from a recent intraday low of USD94.8/bbl to close above the USD100/bbl mark.

Market Wrap International:

The global equity indices produced a relief rally on Friday as investors drew comfort from the latest comments of Fed officials on the upcoming rate decision. The Asian markets, however, closed the trading session on Friday before responding to the latest comments. In the U.S, the S&P 500 Index jumped 1.9% on Friday with 11 sectors closing the session positive. Other benchmark indices moved in sync. A strong set of results from Citigroup Inc. supported investor sentiment in banking stocks previously battered by a number of results below the expectations announced earlier in the week. At least two members of the Fed who are considered interest rate hawks have reportedly ruled out a jumbo size 100bps hike in Fed rate for the upcoming meeting.

In Europe, the benchmark Stoxx Euro 600 Index rebounded by 1.8% led by the autos and technology sectors. The Euro consolidated further above parity against the USD and jumped another 0.5% on Friday. The investors in Europe have toned down their expectations of the upcoming rate hike decision in the wake of the latest comment from the Fed and softening of commodity prices.

In Asia, markets reeled from weak economic growth data and newsflows on defaults by property groups in China. Surprised policy hikes by the central bank of Singapore and the Philippines also added to investors' concerns. Banking and insurance stocks were battered on the macro newsflow. Equity indices in Japan were the outlier among the major markets in Asia and Nikkei 225 rose 0.5% led by retail and tech stocks on positive earnings guidance.