Tadawul Review:

Tadawul All Share Index (TASI) extended its gains for the third straight session on Tuesday, adding 206 points (+1.8%), to close at 11,761 levels. TASI has added a cumulative of 598 points (+5.3%) in the last three sessions. More importantly, today’s rally witnessed healthy trading activity with volume (191mn shares) and value traded (SAR7.1bn) above their 3-month moving average levels. The index gains were broad-based as 19 out of 20 sectors closed up while the advance to decline ratio stood at an impressive 5.8x. Banks (+1.8%) and Materials (+2.8%) sectors drove the market while Al Rajhi Bank (+2.3%) and Maaden (+9.5%) contributed the most to the index accretion. Al Munajem food and Al Masane were the top gainers for the day closing up by 10.0%. TASI’s recovery likely stems from various factors including recovery in international markets, a rebound in oil prices from a low of USD95/bbl to USD107/bbl levels, and a strong ongoing 1h2022 result season.

 

 

Market Wrap International:

Global equity indices moved in divergent directions on Tuesday with the equity indices in the US and Europe sustaining the recovery while benchmarks in Asia recording minor losses. The interest rate decision by ECB and BoJ (both due this week) and property markets in China remained a focus area. In the U.S, key indices edged higher in a broad-based move with investors focusing more on the upcoming earnings announcement and the release of economic data. The S&P 500 Index closed higher by +2.8% with materials and banks’ names in the lead.

In Europe, the Stoxx Euro 600 Index pared intraday losses to gain +1.4% by the session end. The rising oil prices and the talks of a bigger than earlier guided interest rate hike of 50bps vs 25bps by the ECB (meeting due on Thursday) pushed energy and bank names higher. Meanwhile, Euro remained on the recovery path for the fourth straight session and gained another 0.6% on expectations of a rate hike.

 

In Asia, the equity markets underwent a volatile session on Tuesday and managed to close with minor losses of 0.2-0.3% barring HangSeng in Hong Kong which dropped by 0.9%. Investors' excitement about the promised support from the Chinese central bank to support economic activity subsided. Meanwhile, concerns about default on mortgages in the property market gained more traction. Investors also are spoked by a new source of political tension between China and the US on the announced visit of the US house speaker to Taiwan. Japan’s equity indices ditched the broader negative trend in the region and moved up by 0.1-0.5% as the market opened after a holiday on Monday.