Tadawul Review:

Tadawul All Share Index’s (TASI) knitted together two successive sessions of gains, adding 218 points (+1.7%) on Monday to take the index to its highest closing since 16th May. The index opened 23 points positive and went on to add 234 points before settling at 12,907 levels. The Banking sector took the lead adding 171 points (+3.6%) followed by Utilities (+3.1%) which added just 9 points. Al Rajhi Bank (+4.3%), SNB (+2.6%), and BSFR (+7.1%) were the major index movers for the day. Trading volumes and value surged by 50% and 65% to 227mn shares and SAR10.0bn. Brent prices continued their upward march and are now trading at USD120/bbl levels post-China’s decision to roll back COVID-19 restrictions.  Cumulatively, the index has added 377 points (+3.0%) in the last two sessions and the market is likely to maintain its momentum given elevated oil prices. 

 

 

 Market Wrap International:

On Monday, the United States' equities and bond markets were closed for the Memorial Day weekend, while U.S. futures climbed, though with smaller gains, as higher-than-expected inflation in Europe outweighed optimism from easing Chinese lockdowns. The S&P500 futures increased +0.52% after trading as high as +1.12%, while the Dow Jones and Nasdaq 100 futures rose +0.6% and +1.04%, respectively. While the best weekly gain since November 2020 helped to lift sentiment, concerns about hawkish central banks, weaker growth, and rising food prices remain in the spotlight as investors await Friday's non-farm payroll data, as well as the Fed's scheduled start to shrink its $8.9 trillion balance sheet on Wednesday.

European stocks surged on hopes of loosening restrictions in China, however higher-than-expected inflation in Germany and Spain dampened sentiment. The inflation report comes ahead of an ECB meeting on June 9th, when it is largely expected to declare the end of large-scale asset purchases and reaffirm plans to hike interest rates for the first time in almost a decade in July. The preliminary figure for German inflation year-on-year in May increased to +7.9% from +7.4% before, exceeding expectations of +7.6%.

Asian markets were a sea of green post-China’s rollback of strict pandemic restrictions. The MSCI Asia Pacific Index posted its biggest jump (+2.1%) this month led by tech and consumer discretionary. Chinese shares rose with SH Composite closing up 0.6% while shares in Hong Kong were also up by 2.1%. In Japan, Nikkei 225 jumped by 2.2% and the KOSPI in South Korea closed up by 1.2%. SENSEX, in India, recorded gains to the tune of 1.9%.