Tadawul Review:

Tadawul All Share Index (TASI) ended the first session of the week with an increase of 48 points (+0.4%) to close at 12,804 levels, the highest closing since July 2006. The index opened with a positive gap of +0.7% and maintained above the previous close for the whole session despite increased volatility. Many sectors ended the stretch in positive including the energy sector which rose by +0.8%, contributed by ARAMCO, which hit a new all-time high of SAR 44.6/share, and Petro Rabigh, which gained by +7.3%. The materials sector closed with a gain of +3.3%, due to positive performance by many companies in the sector including CHEMANOL and SABIC Agri-Nutrients, which rose by +8.7% and +7%, respectively. SABIC reached its highest close since 2008 at SAR 136.8/share. Trading volumes and values decreased by -9.1% and -9.8%, respectively. In the near term, strong oil prices are likely to continue to support the Energy and Materials sector keeping intact the upward momentum of the market.

Market Wrap International:

The unforeseen rippling impact of Russia's invasion of Ukraine on the commodities market will continue to dominate market debate next week, even as traders begin to prepare for the Federal Reserve meeting later in the month. Speculation about the size and pace of rate hikes will persist. The monthly report on consumer prices, due on March 10, will be the most important economic report to keep an eye on. Economists predict a 0.5 percent increase in the core CPI and a 7.5 percent increase in consumer prices YoY. Costs for energy and food will be constantly monitored, while prices for travel-related categories such as hotel, airline flights, and car/truck rentals are projected to rebound after stabilizing during the Omicron spike. On the earnings front, some major corporates that are expected to announce their financial results this week are Zoom, Salesforce, Domino’s Pizza and Broadcom.

In the European markets, investors will be closely watching the European Central Bank monetary policy meeting scheduled this week (10th March) given increased volatility and uncertainty in macro variables stemming from Russia – Ukraine conflict. Inflation estimates of Euro region for 2024 are expected to be increased to 2%. The general market consensus is that ECB will likely stick to its path set out early. Elsewhere, Russia is slated to announce its inflation numbers for February with consensus estimates suggesting a print of 8.8%. However, it will depict only a glimpse of price shock that is expected to come ahead as impact from the currency freefall will be more visible in coming weeks (Russian Ruble has fallen almost ~30%).