Tadawul Review:

Tadawul All-Share Index (TASI) declined in the Sunday session by -89 points (-0.8%) to close at 11,053 levels, its lowest closing level since the beginning of November. The decline was driven by the impact of the decline in Brent oil prices. TASI opened the session with a slight decrease from the previous closing level, and the index continued its decline until the end of the session, reaching its intraday low level and recording losses of -119 points. TASI was able to reduce some of its losses in the closing auction. In general, all sectors except for three closed in the red zone, while 48 shares rose and 154 fell. Banks (-1%), Materials (-1.4%), and Utilities (-1.7%) sectors were the major drags on the index and contributed a total of -70 points. Stocks-wise, Al Rajhi Bank (-1.2%), Saudi National Bank (-1.7%), and Maaden (-2.6%) pulled the index down the most. The trading activity witnessed a decline of 20% and 27%, respectively, to reach 86mn shares and SAR3.1bn. The index has held up above the 11k mark which bodes well for the overall market direction. The index may continue trading in a range in the near-term.

 

 

Market Wrap International:

The global equity indices, barring indices in Hong Kong, consolidated recent recovery last week with follow-through impact of below-expected CPI in the U.S, further affirmed by PPI data, U.S-China talks, new measures for Chinese property sector and easing commodity prices. Next week’s policy and data calendar is relatively light which allows the investors to revisit current views. In the US, the release minutes of Fed meetings are an important track for possible insight into future direction of rate decision. The economic data last week was mixed though the Fed Speak was clearly more hawkish. The next week in the U.S will be shortened by a Thanksgiving holiday on Wednesday.

In Europe, major indices (Stoxx Euro 600, DAX, CAC40) have made a strong comeback from the index lows seen in the back of concerns on winter supply issue and rate hike decision. The investors will likely search for fresh triggers which can sustain the market rally from current levels. The market reaction to the announcement of economic plans by the new government was quite muted. Further weakness in energy prices as the region braces for peak winter demand may prove to be a good trigger for the market. Minutes of ECB policy meeting, PMI data for the region are two important economic releases this week.  

In Asia, indices in Hong Kong (HangSeng: +3.8%) were the major outlier once again last week. Looking ahead, major updates in China (policy rate) and Japan (CPI) would be in the limelight. Investors are keeping a close eye on any possible adverse response from the Chinese authorities on the recent surge in COVID-19 infections. The drop in commodity prices and stability in the currency bode well for the region and may provide room for further performance next week. ‎