Tadawul Review:

Tadawul All Share Index (TASI) added 140 points (+1.1%) on Monday to close at 12,339 levels, the highest closing since 9th June. TASI opened Monday's session with a positive gap of 38 points but quickly underwent selling pressure to reach a low of 12,197, from where dip-buying propelled the index by 142 points. The index rally was broad-based as 19 out of 20 sectors closed in the green zone, while the advance to decline ratio was recorded at a healthy 9.2x. The rise in the index for Monday's session was led by the Banks (+1.0%), Materials (+1.6%), and Energy (+0.8%) sectors as they cumulatively contributed 81 points to the index gains. The Consumer Durables & Apparel sector was the top gainer for the day rising by +2.5%. The trading activity witnessed an uptick with value and volume being recorded well above the 3-month average rising by 18% and 27% DoD to 209mn shares and SAR7.6bn. TASI has recorded positive gains for the fifth consecutive session accompanied by healthy trading activity signaling strong market momentum. However, weak manufacturing data in several countries weighed on Brent oil price which was down by 9% DoD and can put TASI under pressure in the near term. 

 

 

Market Wrap International:

The global equity indices moved broadly sideways on Monday with investors closely tracking the development of the US House Speaker’s visit to Taiwan. The latest comments from the Fed officials have also contradicted the market’s view on interest rate hikes needed to rein in inflation. In the U.S, the S&P 500 and Nasdaq Composite underwent a more subdued session with the index losing 0.3% and 0.2% at the close. Economic data in the U.S was mixed with PMI coming ahead of consensus while construction spending underperforming expectations. Meanwhile, the yield on 2-year bonds in the U.S jumped 2bps.

In Europe, the benchmark Stoxx 600 Index underwent a range-bound session with the index moving between gains and losses and managing to close with minor losses (-0.2%). Real Estate and energy were the major drag on the index performance. Investors are also jittery over the seasonality in returns for the index. The months of Aug- Sep have on average delivered negative returns for the past 25 years.

In Asia, markets broadly were unchanged barring Japan (Topix: 1.0%, on corporate results) and India (Sensex: 1.0% on better earnings in automobile and healthcare stocks). Equity indices in China, Hong Kong, Korea, and Taiwan were broadly unchanged. The factory production in China showed an unexpected contraction for June and spurred the expectation of fresh economic stimulus.