Tadawul Review:

Tadawul All Share Index (TASI) closed negative for the fourth straight session losing 42 points (-0.4%) to close at 11,979 levels. Wednesday's trading session was an eventful one as the market opened positive and rose until midday before changing course to close down DoD. Overall, 10 of 20 sectors closed down and the advance to decline ratio remained below 1.0x (0.83x). The decline was led by the Energy sector (-1.6%) which shaved 16 points followed by Banks (-0.2%), and Materials (-0.3%). ARAMCO (-1.5%) and Al Rajhi Bank (-0.7%) were once again the major drag on the index while SNB (+0.8%) and SABB (+2.2%) provided the much-needed support. The trading activity receded with volume and value decreasing by 20% and 29% to 184mn shares and SAR6.4bn. In the last four sessions, the market has lost a cumulative of 625 points (-5.0%) and the upcoming Fed’s decision on rate hike is likely to provide clarity on the market direction in the near term.

 

Market Wrap International:

The global equity indices ended an eventful day broadly in positive territory though not without their fair share of volatility. The ongoing narrative of a significant rate hike by the Fed in its meeting due later in the day received further support by the announcement of an emergency meeting of the European Central Bank (ECB). The disclosure of the agenda in the meeting, however, served to calm the investors’ nerves. A sizable 75bps rate hike by Fed along with accompanying comments signaled overall Fed’s preparedness to rein in inflation. The latest decision ended the uncertainty surrounding the timing and extent of the rate hike and triggered a rally in both equity and bond markets on Wednesday. S&P 500 Index jumped 55 points (+1.5%) while the yields on US 10-year bonds slipped by 7bps.

In Europe, the latest announcement by the ECB to introduce new tools to calm bonds markets was taken positively. The benchmark Stoxx Euro 600 index rose 1.4% while the yields on sovereign bonds of member countries recorded a major drop.

 

In Asia, positive economic data in China (Industrial Production) emerged as a key driver for the region and helped indices in China (Shanghai Composite: +0.5%) and Hong Kong (HangSeng: +1.1%) to close in positive.  Indices in Japan (Topix: -1.2%, lingering concern on currency), Korea (Kospi: -1.8%), and India (-0.3%) however closed in red.