Tadawul All-Share Index (TASI) ended Sunday's session positively for the second day in a row, rising +13 points (+0.1%) to close at 10,459 levels. TASI had started the session negatively, down -5 points from the previous close, but TASI soon started to rise during the first hour of trading, as it reached its intraday high at +30 points, from which the index began to fluctuate during the remaining hours of the session between profits and losses as trading was in the range of 50 points, and despite that, TASI was able to close in green. In general, 13 sectors out of 20 closed in the green zone, while 141 stocks rose and 69 fell. Telecom (+2.7%), Materials (+0.4%), and Real Estate (+0.9%) sectors led the index gains, while Health care (-0.4%), Insurance (-0.3%), and Transportation (-0.7%) were the major drags on the index. Among stocks, STC (+2.6%), Zain (+9.8%), and Dar Al Arkan (+2.8%) contributed most to the rise of the index. The trading activity witnessed a decline in the volume and value of trading by 5% and 8%, respectively, to reach 122mn shares and SAR4.1bn.
The global equity markets are likely to trade cautiously over the next few sessions with the investors digesting the updates on recent events on stress on the financial sector on both sides of the Atlantic. Investors’ sensitivity to any negative news around the financial names may draw an oversized response in the market. The treasury yields have responded to the latest dot plot from the Fed suggesting 5.25% to be the peak rate, just a notch above current level. Beyond stress in the financial sectors, investors will also focus on the upcoming data on consumer confidence, inflation (PCE Core deflator) and housing. A strong data on either growth or confidence may serve to alleviate investors’ concerns on slow-down in economic growth.
In Europe, the volatility in stock price in Deutche Bank and credit default swap of the bank’s bonds remain a big concerning issue for the investors in the aftermath of forced merger between UBS and Credit Suisse. On the data front, CPI for the region is likely to show more easing. German IFO expectation, a key gauge proxy for GDP growth in the country, and mortgage data in U.K are two important data points in the region,
In Asia, markets will likely keep track of latest developments in both the U.S and Europe. Besides, important economic data points and a raft of banking results are also due in China next week.