Tadawul All Shares Index (TASI) dropped by 172 points (-1.4%) on Wednesday, capping the monthly gains to 84 points (+0.7% MoM: YTD: 9%). The index started the session on a weak note and continued the decline amid investors' fears, affected by the volatility in the major global markets and oil prices. In general, 18 out of 20 sectors closed with a decline, while 169 shares declined, and 37 shares rose out of 217 shares. Banks (-1.3%), Materials (-2.4%), and Energy (-1.7%) sectors were the major drags on the index and contributed to the index's drop of 120 points. Amongst the stocks, Aramco (-1.7%), Riyad Bank (-4.7%) and SABIC Agri-Nutrients (-4.7%) were the drags for the index. The trading activity witnessed a significant improvement in the volume and value of trading by +27% and +19% to reach 192mn shares and SAR8.3bn, which is the highest during the month. The index is likely to be influenced by volatility in international markets given no major triggers in near-term and weakness in oil prices.
There was no major respite for the global equity indices on Wednesday, the fourth straight session post Jackson Hole address last Friday. The major indices concluded the month on a weak note as economic data (CPI in Euro, factory data in China) added to already subdued sentiments. In the U.S, the benchmark indices dropped by another 0.6-0.9% with risk-off mode forcing investors to look for cover in defensive names and cash. The yield curve once again moved higher on Fed speak.
In Europe, the release of CPI data for Aug (9.1% YoY, another all-time high) spurred market chatter of a jumbo rate hike of 75bps in the upcoming policy decision in late Sep. The benchmark Stoxx Euro 600 Index fall by 1.1% at session close. Country level indices mirrored a similar trend. Euro held its ground above parity against USD while commodity prices dropped.
In Asia, the equity markets showed some signs of stability on Wednesday. Indices in China (Shanghai Composite: -0.8%) and Hong Kong (HangSeng: unchanged) were dodged by wider concerns of fresh COVID-19 related lockdown and new economic data. Equity indices in Korea (KOSPI: +0.9%) and Taiwan (TAIEX: +0.9%) moved up while indices in Japan were down by 0.3-0.4%. Market in India was closed for a national holiday.