Tadawul Review:
Tadawul All Share Index (TASI) ended Wednesday’s session with a minor drop of 12 points (-0.1%) to settle at 11,293 levels. The index opened the session negatively by 6 points from the previous close and continued declining to reach its intraday low by -65 points before recovering at the end of the session.In general, 15 out of 20 sectors closed in the red zone, while 132 stocks fell and 83 rose. Banks (-0.2%), Utilities (-1.7%), and Energy (-0.2%) sectors contributed the most to the index's fall of 16 points. Stockwise, Saudi National Bank (-1.2%), Al Rajhi Bank (-0.4%), and Etihad Etisalat (-2.6%) contributed most to the fall of the index. The trading activity witnessed a decline in volume and value by 9%% and 7%, respectively, to reach 222mn shares and SAR5.7bn in value traded. The index is likely to see more sessions with sideways moves in near-term.
The global equity markets moved in divergent directions on Wednesday despite better than expected CPI data in the U.S. The debate on soft lending and recession in the U.S, recent performance of key indices and the expected drop in earnings of S&P 500 Companies continued to play up in investors’ minds. The CPI for April-23 of 4.9% YoY (+0.5% MoM) came slightly lower than consensus expectations and reinforced the market view of possible pause in the upcoming FOMC meeting. The treasury yields in the U.S dropped by 8-11bps with 2-yr yield slipping below 4% mark again. The key equity gauges, S&P 500 and Nasdaq Composite Index, were up 0.4% and 1.0%. 7 out of 11 sectors delivered positive returns in the S&P 500 Index with Communication Services in the lead.
In Europe, the CPI data in the U.S failed to contain the market cautiousness over the upcoming monetary policy as the earning season draws to a close. The Stoxx Europe 600 Index dropped by 0.4% amid intraday volatility. Country level indices too moved down in the range of 0.3-0.5%.
In Asia, the key indices dropped for the second straight session. The weak trade data in China a day before and no major trigger in near-term weighed on market direction. All major equity indices dropped in the range of 0.5-1.1% barring SENSEX in India by 0.3 which managed to broadly hold its ground.