Tadawul All-Share Index (TASI) remained largely unchanged on Tuesday, as it declined by only 13 points (-0.1%) to close at 10,634 levels. TASI had opened the session at 10,659, a slight increase from Monday's closing level, and trading remained within a 65-point range throughout the day. TASI recorded its intraday low in the last hour of trading, down by -52 points, before adding +39 points in the closing auction to trim some of its losses. In general, 16 out of 20 sectors closed in the green zone, while 103 stocks rose and 101 fell. Materials (+0.3%), Energy (+0.5%), and Food and Beverage (+1%) sectors contributed to the stability of the index, while Banks (-0.9%), Insurance (-0.7%), and Capital Goods (-0.5%) were a drag on the index. Among stocks, Al Rajhi Bank (-0.8%), Saudi National Bank (-1.2%), and Saudi British Bank (-2.6%) pulled the index down the most. Trading activity witnessed an increase in volume and value by +6% and +8%, respectively, to reach 144mn shares and SAR4.5bn. TASI is likely to continue trading in a narrow range.
The global equity market moved in divergent directions on Tuesday amid nervousness over the latest Fed comment. The lack of any other major data updates also added to market volatility. In the U.S, two Fed officials suggested on Monday that the Fed would need to raise the policy rate above 5% before pausing. The latest comments highlighted the big disconnect between what Fed has been advocating and the currently implied market rates. The benchmark S&P 500 and Nasdaq Composite Index managed to deliver positive returns on Tuesday and moved up by 0.7% and 1%. Communication Services and consumer discretionary were the top performing sectors in the S&P 500.
In Europe, the benchmark Stoxx Euro 600 Index dropped by 0.6%, reversing a two day rally. Industrial, Real Estate and tech were the three major drags for the index. Country level indices moved in tandem and were down 0.1-.6%.
In Asia, barring Japan which resumed trading after a national holiday on Monday, Taiwan and Korea (KOSPI: little changed), all other markets were in red by 0.1-1%. The latest Fed comments has raised the risk that the USD dollar index may recoup some of the losses suffered in recent sessions, a key driver of Asian markets along with China re-opening theme. India’s SENSEX was the worst performing index and was down 1%. Below-expected earnings by Tata Consultancy made investors more cautious before the result seasons get into full swing.