Tadawul Review:
Tadawul All Share Index (TASI) closed on the second trading day after Eid holidays and managed to close with modest gains of 42 points (+0.4%). Today, telecommunications stocks led the market higher, and Al Rajhi Bank contributed the most to the index gain. The index witnessed an initial decline at the beginning of the session before it started to rise and close at 11307 levels. In general 18 out of 20 sectors closed in the green zone, while 167 stocks rose and 42 fell. Telecommunications (+1.3 %), Materials (+0.4%), and Health care equipment and services (+1.8%) sectors contributed the most to the index's rise of +19 points. Stock-wise, Al Rajhi Bank (+1.3%), Etihad Etisalat (+2.8%), Saudi Telecom (+0.9%) contributed most to the rise of the index. The trading activity witnessed an increase in volume and value by 15% and 9%. respectively, to reach 246mn shares and SAR6.9bn. TASI has defied the negative volatility in international markets in recent sessions. Overall, the index gained 0.6% month-to-date. Recent performance, low oil prices and volatility in international benchmarks may force the index to partially pare its recent gains.
The global equity markets remained volatile for the second straight session as concerns on the renewed stress in the banking systems in the U.S and Europe outweighed any positive impact from ongoing earnings season. The focus is once again shifting to economic data and the upcoming FOMC meeting. The stock price of a troubled mid-sized bank in the U.S, First Republic Bank, sank to a record amid reports of the government's unwillingness to support the bank with public funds. The sovereign yields in the U.S bounced back while energy prices further softened. The S&P 500 Index fell by 0.4% and Nasdaq Composite rose by 0.5%. All but one sector on the S&P 500 closed in red. Strong results in tech names sustained the momentum for the second straight session.
In Europe, the benchmark Stoxx Europe 600 Index fell for the third session in a row and was down 0.8% on Wednesday. The concerns on recession, stress in the financial sector and soft commodity prices have weighed on the index’ performance. The country level indices too failed to find any footing and were down 0.5-0.9%.
In Asia, the sell-off seemed to have lost steam as major indices moved in a narrow range of -0.02 to +0.3%. The fears of slow economic growth in the developed economies have triggered paring of most of the gains in key indices. Hang Seng in Hong Kong was a sole outlier in the region with +0.7% return.