Tadawul All Shares Index (TASI) dropped 141 points (-1.1%) on Thursday to close at its one-month low levels of 12,143. The impact of the decline in major global markets and fluctuations in oil prices continued to have a negative bearing on TASI. The index opened the session in negative territory and maintained its downward trajectory. The decline was broad-based as 17 out of 20 sectors closed negative, 151 stocks fell, and 55 stocks rose. The usual suspects, namely the Banks (-1.5%), Materials (-0.7%) and Energy (-1%) sectors, cumulatively pulled the index down by 93 points. Stocks-wise, Al-Rajhi Bank (-1.4%), Saudi National Bank (-2.2%), and Aramco (-1.1%) put the most pressure on the index. Trading activity witnessed a decline in the volume and value of trading by -15% and -17%, respectively, to reach 163mn shares and SAR6.9bn. TASI has marginally breached its 200DMA in the last trading session. Possibility of the index taking support from its 200DMA is high as the impact of interest rates movement in the U.S and oil price drop subside.
The volatility in international markets continued unabated on Friday with most major indices closed down. Fed rate hike, energy supplies, latest lockdown in China and currency moves were the major themes driving the equity indices. In the U.S, the benchmark S&P 500 and Nasdaq Composite Index lost another 1.2-1.3%, making cumulative decline since Jackson Hole event the preceding Friday of 3.3% and 4.2% respectively. Indices looked to build on the momentum from the previous day’s marginal positive closing but pared gains. Ten out of eleven sectors in the S&P 500 Index were negative The labor market data (Wage growth and new hires) provided a mixed reading for the next policy decision with a jump hike of another 75bps becoming a foregone conclusion for most participants. The treasury yields and US dollar index retreated modestly post job data.
In Europe, the Stoxx Euro 600 Index changed course as valuation and drop in energy prices brought dip buying in action. The index traded sideways for the first part of the trading session before taking a definite direction following the release of economic data in the U.S.
In Asia, equity indices were broadly negative with currency weakness and latest lockdown measures in China dragging the markets. Equity indices in Hong Kong (HangSeng: -0.7%), Japan (Topix:-0.3%, currency touching multi-decade low), Korea (KOSPI: -0.3%), closed negative. The benchmark SENSEX Index in India posted a marginal gain of 0.4% while in China (Shanghai Composite) was broadly unchanged.