Tadawul Review:

Tadawul All Share Index (TASI) ended its five-day winning streak by recording a loss of 28 points (-0.2%) to close at 12,311 levels on Tuesday. The market opened at the same levels as yesterday’s close, however, during the first trading hour, it lost a whopping 118 points as concerns over falling brent oil prices weighed in. TASI managed to pare some losses from its low as investors flocked toward stocks with strong expected 1H22 results. Overall, 11 of 20 sectors closed lower while the advance to decline ratio was greater than one (1.02x). The Banks (-0.4%) and Energy (-0.5%) sectors put pressure on the index while the Materials (+0.4%) sector provided some support. Al Rajhi (-1.3%) and Aramco (-0.5%) were the major drag on the index while SNB (+1.8%) and Maaden (+5.5%) kept the index from free falling. Trading activity continued to remain above its 3-month average levels increasing by 0.4% and 2.0% to 210mn shares and SAR7.8bn value traded. In addition to the ongoing result season, TASI is likely to be affected by concerns over global oil demand and the developing geopolitical situation involving the US, China, and Taiwan.

 

 

 Market Wrap International:

The global equity indices showed a broader risk-off rally in the backdrop of the much-hyped visit of the US House Speaker to Taiwan. The latest comments from the U.S Fed official on the prospect of a pause or reduction in the interest rate hiking cycle once again challenged the market’s view and pushed yields in short-tenures higher. Given the drag from geo politics and comments from Fed officials and the push from ongoing earnings seasons, the US benchmark indices oscillated between gains and losses. The S&P 500 Index managed to close at -0.7% while the Nasdaq Composite closed down by -0.2%.

In Europe, the spike in gas prices has once again brought concerns about winter energy supplies to the forefront. This, along with general nervousness ahead of the much-hyped visit of the U.S House Speaker to Taiwan clipped 0.3% from the benchmark Stoxx Euro 600 Index. Travel and leisure stocks underperformed while energy and telecom were in the lead. Investors were also focused on the upcoming BOE meeting due on Thursday where expectations of upto 50bps hike in rate have become widespread.

The Asian markets were understandably most affected by the increased risk-off trend in the face of heightened geo-political risk between the two global powers. The indices in China (Shanghai Composite: -2.3%), Hong Kong (HangSeng: 2.4%), and Taiwan (TAIEX: -1.6%) dropped the most. The currency appreciation of the Yen in Japan led to profit taking in stocks, particularly in export-focused names. India (Sensex: 0.0%) showed little sensitivity to events in the region and was largely unchanged as investors were more focused on earnings season and foreign inflows.