Tadawul Review:

Tadawul All Share Index (TASI) sustained its record-breaking rally into 3rd session and rose 145 points (+1.2%) to close at 12,495 levels. The index broke through its previous week’s high and now trades at highest levels since 2006. The market opened with a positive note and rose for the most part of the session. Almost all sectors contributed to index rise with Banks (+1.5%), Materials (+0.8%) and Energy (+1.1%) leading from the front. Above average liquidity and volumes were seen with +17% and +27% respective jump to 10bn and 243mn shares. The increase in interest rate, higher energy prices and strong results for Dec-end quarter are the key drivers of market’s strong positive momentum. Overall, the index is likely to maintain its positive bias in coming sessions though high levels of strong prices, particularly in banking sector where many stocks trades at record high, may draw intra-day profit taking.

Market Wrap International:

U.S. equities pared declines on Wednesday following higher than forecast retail sales figures for January, while shorter-dated Treasury yields declined following the release of the Federal Reserve policy minutes. Retail sales in January rose by the most in 10-months, rising +3.8% versus +2.0% forecast by analysts and up from a revised lower +2.5% in December. The S&P500 pared modest declines to close +0.1% higher aided by industrials +0.5% and consumer discretionary +0.3%. The Dow Jones edged -0.2% lower, while the Nasdaq Composite was also slightly down -0.1%.

European equities struggled for today’s session with the release of unfavorable economic data, leading most markets to post losses. The broad European index (Stoxx600) recovered some gains from initial losses to close marginally down. In the UK, data revealed that inflation last month rose at the fastest pace in 30-years. As a result, FTSE100 was down -0.1%. A similar trend was witnessed in Germany where DAX closed lower -0.3%.

In Asia, nearly all indices closed in the green zone with improvement in the geopolitical situation. In China, the stock market rallied by +0.6% (SHCOMP) on the back of slowing inflation data providing room to People Bank of China to ease policy. In Hong Kong, similar sentiments helped the market surge by +1.5%. In Japan, Nikkei 225 recovered yesterday’s losses, soaring by +2.2% (biggest daily gains since Nov last year). In South Korea, KOSPI managed to record its best day in two weeks, rising by +2.0%.