Tadawul Review:

Tadawul All Share Index (TASI) recorded its highest slump since November last year falling by 2.2% (305 points) to close at 13,509 levels. Volatility in international markets and more specifically easing oil prices (Brent down by 18% since its peak of USD128/bbl in March-end) resulted in a massive sell-off in Tadawul. The decline was broad-based with 17 out of 20 sectors closing in the red. Banks, Materials, and Telecom sectors led the rout contributing 208, 33, and 20 points to the index decline. Trading volumes and value also receded by 17% and 18% to 185mn shares and SAR9.4bn. Investors remain cautious as sliding oil prices may result in more profit booking in the near term.

 

 

 

Market Wrap International:

The global equity indices painted a mixed picture on Tuesday with markets in the U.S and Europe paring losses from the previous sessions while the Asian benchmarks continued facing the selling pressure. Following a steep drop in prices in the past few sessions, investors have come out to benefit from dip buying in oversold stocks. In the U.S, the indices jumped 0.2-1.0% as S&P 500 index (+0.2%) recovered from its 13-mth low while Nasdaq Composite (+1.0%) also showed signs of recovery. The yield on 10-year bonds in the U.S dropped by 6bps to slip below to 2.98%. Important economic data on the U.S CPI is due on Wednesday which may renew concerns on inflation and interest rate hike.

In Europe, the benchmark Stoxx  600 Euro Index rebounded from its 2mth low and gained 0.7% as economic sentiment was better than forecast with the European ZEW sentiment index coming in at -29.5 compared with -43 previously. Healthcare, financials and real estate were in the lead. Valuation and recent underperformance of European stocks has attracted fresh interest from investors. Meanwhile, investors also drew comfort from the drop in the gas price benchmark in Europe despite the latest plans by the EU members to reduce dependence on Russian energy.

Asian markets' decline continued for the seventh day as investors continue to offload riskier assets over concerns of rapid US credit tightening and extended lockdowns in China cities. SH Composite rebounded (+1.1%) after the People’s Bank of China reaffirmed its pledge to address mounting economic pressure. In Hong Kong, Hang Send recorded a decline of -1.8% as tech giants namely Alibaba and Tencent tumbled by -4.8% and -2.3% respectively. Similarly, Nikkei 225 and KOSPI declined by -0.6% and -0.5% while Sensex dropped by -0.2%.