Tadawul Review:

Tadawul All Share Index (TASI) continued its downwards trajectory for the third consecutive day, losing 130 points (-1%) to close at 13,379 points. The aggregate loss in the last three days has been a massive 441 points or -3.2%. On Wednesday, 13 out of 20 sectors closed down with index heavyweights namely Banks (-1.3%), Materials (-1.2%), and Energy (-0.9) leading the decline. Amongst the stocks, ARAMCO, SABIC, and Al RaJhi contributed the most to the index decline. Trading volumes and value also declined by 11% and 8.2% to 165mn shares and SAR8.7bn. Global concerns over rising inflation, hike in interest rates and a slowdown in global oil demand are mounting which might keep TASI under pressure in the near term.

 

 

 

Market Wrap International:

On Wednesday, U.S. stocks slumped as statistics revealed that inflation in the United States was greater than expected, while there were indicators that inflation had peaked earlier this year. Inflation reached +8.3% year over year in April, down from +8.5% in March but higher than the +8.1% projected by economists, growing +0.3% month over month versus +0.2% expected. Technology -3.3% and consumer discretionary -3.6% weighed on the S&P500, while energy gained +1.3% on higher oil prices. The Dow Jones fell by -1.0% percent, while the Nasdaq Composite fell by -3.2%. The yield curve flattened, with the difference between the 2 and 10-year rates falling -9.5 basis points to 0.291 percent, indicating traders' concerns about the economy's prospects.

In Europe, investors were comforted by decreased COVID-19 infections in China and US President Joe Biden's consideration of removing Trump-era tariffs on Beijing, despite the negative feeling from increasing US inflation. While severe restrictions remain in place, Shanghai announced on Wednesday that half of the city has been designated as COVID-free, while cases in Beijing have decreased to their lowest level since April 26th. With indices rising across the area, the Euro Stoxx 600 jumped +1.7%, as did the DAX +2.2%, CAC +2.5%, and FTSE100 +1.4% percent. In terms of economic indicators, German inflation was in line with predictions, gaining +7.4% year over year to April from +7.3% earlier, and climbing +0.8% month over month from +2.5% previously.

Most Asian markets recovered ending their seven-day slump as Covid cases in China eased and investors looked to accumulate stocks at cheap valuations. SH Composite increased by +0.8% led by Chinese renewable energy firms as the People's Bank of China said it will boost support for major renewable energy projects. Hang Seng climbed up by +1.0% on the back of tech stocks led by Alibaba and Tencent. Nikkei 225 also inched up by +0.2% while KOSPI (-0.2%) and SENSEX (-0.5%) closed in the red.