2023-05-29
Daily Market Monitor 29-05-2023
Tadawul Review:
Tadawul All Share Index (TASI) fell on Sunday’s session for the sixth day in a row, dropping by 47 points (-0.4%) to close at 11,138 levels. TASI opened the session positively, by 10 points, and reached its intraday high in the first hour of trading. However, TASI then gradually declined during the remainder of the session to close at its intraday low of -51 points. In general, 14 out of 20 sectors closed in the red zone, while 112 stocks fell and 99 rose. Banks (-0.8%), Telecom (-2.2%), and Materials (-0.2%) sectors contributed the most to the index's -45 point fall. Stockwise, Al Rajhi Bank (-1.0%), Saudi Telecom (-2.7%), and Alinma Bank (-2.4%) were the major contributors. The trading activity witnessed a decline in volume and value of -7% and -8%, respectively, to reach 159mn shares and SAR4.7bn in value traded.
The global equity markets are anxiously tracking progress on the debt ceiling in the U.S over the weekend. The news flow so far suggests a tentative agreement on a host of issues which has paved the way for reaching a deal. A favorable outcome may set the stage for extension in the relief rally seen last Friday. That said, the resolution of the issue will also bring back focus on the upcoming monetary policy and the economic data release this week. The trading week will be shortened by a national holiday in the U.S. The important data points include labor market (JOLT Survey, initial jobless claims), consumer confidence, and ISM. The data points may further divide market opinion on the possibility of further rate hike by the Fed in its upcoming meeting.
In Europe, the key focus area, besides debt ceiling issue in the U.S, is likely to be the CPI print for the region. The surprise inflation reading in the U.K for April has already raised the prospects of uptick in inflation in the region, suggesting further rate hikes by the ECB are on the cards.
In Asia, China’s economic data (PMI in particular) will be in the limelight. Broadly, analysts are expecting softening in both manufacturing and service data which may highlight the slow progress in post COVID economic recovery. Other important data points include LSM in Japan and 1Q GDP growth in India.
Daily Market Monitor 29-05-2023
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