Reports

2022-11-03

Daily Market Monitor 3-11-2022

Tadawul Review:

Tadawul All-Share Index (TASI) made a sharp recovery from its intraday low 197points to close unchanged at session close. TASI had opened the session negatively, down 30 points and continued its decline until the middle of the trading session. The low stock prices encouraged dip buying. Index heavy names (mining stocks in particular) made significant intraday moves. In general, 7 out of 20 sectors closed in the green zone, while 63 stocks rose and 136 fell. Banks (+0.9%), Real Estate (+0.9%), and Utilities (+1%) sectors contributed to the stability of the index, while Materials (-0.8%), Energy (-1.2%), and Telecom (-1.3%) were a drag on the index. Among stocks, Aramco (-1.3%), Maaden ‎‎(-1.9%), and STC (-0.9%) pulled the index down the most. Trading activity also continued to improve for the third day, in terms of trading volume and value, by +9% and +19%, respectively, to reach 199mn shares and SAR7bn. TASI’s performance is likely to be affected by volatility in international markets and the latest decision by FOMC (see details below).‎‎

 

 

 

Market Wrap International:

The global equity indices danced to the tune of the FOMC policy decision and post-meeting press conference by Fed Chair. The initial reaction to the statement was taken positively by the market as equity indices surged, yields dropped and currency retreated. However, the full import of FOMC’s policy statement became clear in the press conference where two major surprises awaited the markets, ‎‎(i) possibility of slower hike in from the next policy meeting or the next as opposed to consensus expectation of slower hike from Dec, (ii) Fed eyeing higher peak of rate relative to previous forecasts. Equity indices gave up intraday gains, yields on treasury surged along withth dollar index.At session close, the S&P 500, Nasdaq Composite were down 2.5% and 3.4%. Tech and other growth names borne the brunt of most of the selling pressure.

In Europe, the benchmark Stoxx Euro 600 Index dropped by ‎‎0.3%, giving up intraday gains of  +0.1%. Investors were cautious ahead of the policy rate announcement by the Fed, due after the session close and BOE (due tomorrow). The newsflow over resumption of wheat and other commodity exports from Ukraine is positive for the region.

 

In Asia, the optimism over possible easing of COVID-19 restrictions in China remained a driving force for the second straight session with indices in Hong Kong (HangSeng: +2.4%) and China (Shanghai Composite: +1.2) posting strong performances again. Except for Sensex in India (-0.4%), other major markets closed modestly up (0.1-0.5%).

 

Daily Market Monitor 3-11-2022