Tadawul Review:

Tadawul All Share Index (TASI) it extended gains for the third consecutive day and added 101 points (+0.8%) to close at 12,431, the highest closing level for TASI in the last two months. TASI started the session on a positive note and continued its gradual upward march peaking at 12,431 before partially paring intraday gains. The index managed to add further 27 points during the closing auction. The market rally was broad-based with 18 out of 20 sectors closing up and the same was reflected in the advance to decline ratio of 2.8:1. Banks (+1.1%), Materials (+0.8%), and Telecom (+1.4%) sectors have had the biggest contribution of 70points in the index's rise. Stocks wise, the most influential on the index's rise was Al Rajhi Bank (+1.8%), Saudi National Bank (+0.7%), and Saudi British Bank (+1.4%). The highest gainers for Wednesday's session included Raydan Food Company and Al Abdullatif Industrial, as they both closed up by +10%. The trading volume activity increased by +6% DoD to reach 179mn shares, while the trading value decreased by -11% DoD to reach SAR6.7bn. The index may undergo a consolidation phase given recent performance and weakness in oil prices.

 

Market Wrap International:

The investors in the U.S and European markets have had a sigh of relief on the release of a much-anticipated US CPI print on Wednesday. The CPI reading (8.5% YoY in July vs 8.7% forecast & 9.1% in June) modestly undershot consensus estimates though the level of inflation remained at a multi-year high. The latest CPI data is positive given faster than expected deceleration substantiates analysts’ views that the worst of inflation is perhaps behind the market. The benchmark indices in the U.S celebrated the data with 2.1% and 2.9% jump in S&P 500 and Nasdaq Composite Index respectively. Tech and other growth stocks led the rally in the U.S.

In Europe, the release of the data during trading hours sent the Stoxx Euro 600 Index soaring up by 0.9% with leisure, real estate, and technology sectors in the lead. The Euro further moved up against the US dollar. The resumption of oil supplies was partially curtailed a day before due to payment issues and weakness in commodity prices also supported the market move.

In Asia, investors were cautious ahead of the data release and most of the markets were under modest pressure with a 0.1-0.5% drop. In China, the central bank has come up with a higher inflation outlook with CPI projected to be above 3% in 1H22. The Hang Seng in Hong Kong was an exception and recorded the highest drop of 2.0% on fears of wider lockdowns in mainland China and selling in tech. KOPSI in Korea (-0.9%) also recorded a significant drop associated with tech selling. Indices in China (Shanghai Composite -0.5%, latest inflation prognosis) and Japan (TOPIX: -0.2%) also closed lower.