Reports

2023-03-19

Daily Market Monitor 19-03-2023

Tadawul Review:

Tadawul All Share Index (TASI) sustained another session of losses on Thursday on concerns of drop in oil prices and the drop in bank prices to mark its lowest closing since ‎‎04/14/2021. The index, in the process, closed below the 10k mark for the second time since 03/27/2023. TASI had managed to sustain above 10k level before the closing auction amid high volatility. However, the index lost 78 points in the closing auction. Traded volumes and traded value increased by 17% and 43%. The major losers for the session include Banks (-0.9%), Energy (-1.6%) and Telecom (-1.1%). Technically, the index faces a big litmus test today where the negative momentum in the index and not-so-supportive international markets backdrop may force the index to show more volatility. Investors are likely to closely track any updates relating to the financial sector in both the U.S (First Republic Bank) and Europe (UBS-Credit Suisse).

 

 

Market Wrap International:

The global markets closed the turbulent week with another volatile session on Friday as investors’ fears of further stress in banking stocks and global recession remained at the forefront. The ECB did not give in to market uncertainty and continued its battle with persistent inflation with another 50bp hike in interest rate on Thursday. This has effectively put more pressure on FOMC and its officials to make good on their hawkish comments on interest rate. The treasury yields in the U.S underwent another wild swing and were down by 14-‎‎32bps up to 10-year tenures. The troubled First Republic Bank fell 33% despite a proposal of liquidity injection. The S&P 500 and Nasdaq Composite were down 1.1% and 0.7% at session close, paring gains seen in the previous session. All eleven listed sectors on the S&P 500 were in red, led by financials and real estate.

Europe painted a similar picture as the benchmark Stoxx Europe 600 index fell 1.2% with a big drag from banks. The talks of potential merger between UBS and its troubled global peer, Credit Suisse, were the major focus area for investors. The rate hike by the ECB also weighed on the investors' sentiment. The country level indices faced similar fate.

In Asia, the market buckled the broader trend as all major markets managed to eke out positive returns. Positive economic data in China and the drop in the yields in the U.S supported the positive move. The major markets were up in the range of 0.6-1.6% led by HangSeng.

 

 

 

Daily Market Monitor 19-03-2023