Tadawul Review:

Tadawul All Share Index (TASI) lost 66 points (-0.5%) to ‎close at 12,526. The index opened sharply lower (-117 ‎points), in the backdrop of volatility seen in the major global ‎markets on Friday and struggled to recover its losses ‎throughout the session. Overall, the index traded in the range ‎of 114 points. 11 out of 20 sectors closed down and 118 ‎out of 217 stocks recorded losses. Banks (-1.1%) and Energy ‎‎(-1.6%) sectors were the major drags on the index and ‎contributed -69 points, while the Materials (+1%) and ‎Telecom (+0.6%) sectors provided some support to the ‎index. Amongst stocks, Aramco (-1.7%), Al-Rajhi Bank (-1.4%), ‎and the Saudi National Bank (-1.3%) influenced the index the ‎most. The top gainers for this session were National Gas and ‎Industrialization Company and Saudi Ceramic Company, ‎which closed higher by 9.9% and 8.7%. The trading activity ‎witnessed a marginal improvement in both volume and value ‎terms (+2% for both) to reach 138mn shares and SAR5.8bn ‎TASI is likely to show more consolidation moves at current ‎levels.‎

 

Market Wrap International:

An uneasy calm is likely to prevail in the global markets ‎following a painful ending to the last week in the wake of ‎Jackson Hole comments by the Fed’s Chairman. An apparent ‎‎“higher for longer” new guidance on interest rate by the Fed ‎will likely resonate among other central bankers soon with key ‎implications for EM currencies and related inflows in equity ‎markets. In the U.S, the data release for the next week is ‎concentrated in labor (non-farm payroll, Job Separation etc), ‎housing and PMI for Aug-22 which may provide important ‎insights into the tightness of the labor market and the latest ‎update on economic activity. The key equity benchmarks in ‎the U.S have lost ‎‏4‏‎-‎‏4.4‏‎% in the preceding week. With concerns ‎on interest rate hike and recession once again taking center ‎stage, equity indices may move sideways.‎

In Europe, the calls for sizable rate hikes by the ECB to tackle ‎inflation are gathering pace as more ECB officials have voiced ‎support for such a move. The higher energy cost has already ‎increased the possibility of double-digit inflation in the region ‎in coming months. The Stoxx Euro 600 Index gave away some ‎of the gains last week but the index is still up 6.5% from its ‎recent low.‎

Asian markets will likely show a response to the latest Fed ‎Speak on Monday with possible negative volatility on Monday. ‎The region faces additional risk of further pressure on ‎currency, reversal of recent foreign flows due to risk-off mode ‎and geopolitical tension between the U.S and China. The ‎economic stimulus announced by the Chinese authorities and ‎current valuation for most of the markets may help in ‎stabilizing the sentiments.‎