Tadawul Review:

Tadawul All Share Index (TASI) failed to maintain its momentum from the last session undergoing a significant beating on Wednesday losing 340 points (-2.9%) to close at 11,320 levels. The index opened negative and slumped from the start before a minor recovery was witnessed during midday. However, the recovery proved to be short-lived as the index continued its downward trend soon losing 175 points while a further 84 points were shaved during the closing auction. The substantial downward movement in the index was mainly due to weakening Brent oil prices (-6.2% DoD) as fears of a slowdown in demand due to the global recession kicked in. The usual suspects i.e. Banks (-3.4%) and Materials (-4.3%) sectors pulled the index down by 221 points. National Gypsum (-10.0%), Amana Insurance (-7.5%), and Ma’aden (-7.3%) were the major losers for the day. The trading activity rose again with volume and value rising by 27% each to 220mn shares and SAR8.3bn.

 

 

Market Wrap International:

The global equity indices showed renewed volatility on Wednesday across the three regions with the risk of global recession increasing taking a center stage. Oil prices once again came under pressure and traded as low as USD107/bbl (Brent) before partially paring losses. In the U.S, the S&P 500 Index (-0.1%) and Nasdaq Composite (-0.2%) swung between gains and losses for the most part of the day before closing slightly negative. A key highlight was the testimony of the Fed Chairman where he reiterated his earlier commitment to sustain the rate hike campaign to fight off inflation despite clearly running the risk of significant slowdown/recession ahead.

In Europe, the benchmark Stoxx Euro 600 Index slid by 0.7% driven by weakness in energy and material names. The CPI print in the U.K came in at 9.1% YoY in May recording a latest 4-decade high. The CPI print along with weak energy prices dragged the benchmark index to its intraday low of -1.8% before dip-buying clipped the losses.

In Asia, equity indices staged a near rout on Wednesday led by renewed fears of a fresh crackdown on Chinese tech stocks and fears of a global recession. Shanghai Composite in China (-1.2%) HangSeng in Hong Kong (-2.6%) led the decline in the region. KOSPI (-2.7%, foreign outflows) and SENSEX in India were also down (-1.4%) on foreign selling in index heavyweights).