Tadawul Review:

Tadawul All Share Index (TASI, during the trading session on Tuesday, fell well below the 12,000-mark declining by as much as 2.9% before recouping losses to close at 12,021 levels, down by 33 points (-0.3%). TASI traded between a wide range of 406 points as fear of global recession took its toll resulting in the market being oversold. The investors quickly moved in to take positions in stocks trading at attractive levels. The Energy (-1.0%) and Telecom (-1.8%) sectors led the market decline contributing 19 points to the index drop. Al Rajhi Bank and ARAMCO were a drag on the index while Riyad Bank and BSFR provided support. Overall, trading activity rose with volume and value increasing by 10% and 3% to 231mn shares and SAR9.0bn.

 

 

Market Wrap International:

On Tuesday, US markets bounced between gains and losses before concluding neutral as investors await the Federal Reserve's policy announcement late tonight. The S&P500 fell -0.38%, erasing earlier gains of +0.76% and paring losses of up to -1.17%. Sector performance was uneven, with technology climbing +0.62% after Oracle rose +10.41% over exceeding quarterly profits and sales projections, and energy rising +0.07%, while all other sectors fell, led by utilities -2.59% and consumer staples -1.29%. The Dow Jones fell -0.50%; however, the Nasdaq Composite rose +0.18%. The FOMC's revised economic estimates, dubbed as "dot plots," will also be in focus, as will retail sales data, which is likely to indicate a slowing in sales in May.

European markets reversed early gains to end down for the sixth straight day as fears of a global recession weighed on mood, with a stagflationary climate in the Eurozone regarded as a greater possibility. The Euro Stoxx 600 fell -1.26% after originally rising +0.99%, with major benchmarks throughout the region falling, including the DAX, which fell -0.91%, the CAC, which fell -1.20%, and the FTSE100, which fell -0.25%. In June, economic morale in both Germany and the Eurozone improved somewhat but remained negative, with the Eurozone reading improving to -28 from -29.5 earlier and the German measure rising to -28 from -34.3 before.

Taking a cue from international markets, Asian equities opened negative on Tuesday on concerns over greater-than-expected rate hikes at the Fed meeting later today. However, the Chinese market namely SH Composite managed to recover posting gains of 1.0% while in Hong Kong, the Hang Seng closed flat. The Nikkei 225 and KOSPI declined by 1.3% and 0.5% respectively.