Tadawul Review:

Tadawul All Share Index (TASI) extended the gains for the third consecutive day to add 103 points (+0.9%) to close at 12,155 levels to end the week on a high. TASI managed to add 167 points (+1.4% WoW) during this week. On Thursday, the market was led higher by the Banks (+0.9%) post-SAMA’s decision to lift its reverse repo rate by 75bps to 2.5% from 1.75%. The announcement by SAMA came following the US Federal Reserve's decision to raise the interest rate by 75 basis points to 2.5%. Following Banks, Materials (+1.5%) and Telecom (+0.9%) sectors contributed the most to the index gains. The session witnessed a tremendous surge in trading activity where volume and value traded rose by 129% and 119% to 317mn shares and SAR11.9bn respectively. The market has continued to rally given strong Brent oil prices and investors' preference for stocks posting strong 1H22 results.

 

Market Wrap International:

The global equity indices broadly edged higher as excitement over ongoing results offset the negativity from fresh economic data in the key regions and disappointment over the lack of policy measures in China. In the U.S, the S&P 500 and Nasdaq Composite rose by 1.4% and 1.8% with energy and consumer discretionary in the lead. The Personal Consumption Index, a preferred inflation gauge for Fed, rose higher than expected in June. Similarly, the U.S Consumer Sentiment Index continued hovering at one of the lowest levels.

In Europe, the Stoxx Euro 600 Index rose 1.3% on Friday led by bank, energy, and construction names. Investors overlooked the latest inflation reading in the region and economic data in Germany as better than expected results, particularly in banks, and high oil prices provided the latest impetus.

The Asian markets put up a more divergent performance on Friday. The indices in China (Shanghai Composite) and Hong Kong (HangSeng) dropped by 0.9 and 2.3% given investors’ disappointment over the lack of any positive comments regarding fresh economic stimulus in the recent meeting of the nation’s top leadership. News of Alibaba being added for the potential US delisting by the regulator also weighed on the prices of tech stocks. Equity benchmarks in Korea (KOSPI: +0.7%, corporate results), India (+SENSEX:1.3%, foreign flows) and Taiwan (TAIEX:+0.7%) were up while Topix (--0.4%) declined.