Tadawul Review:

Tadawul All Share Index (TASI) sustained a record-breaking rally for the second straight day and jumped another 84 points (+0.7%) to close at 12,674 levels. The index started the session on a positive note and made an intraday high of 158 points before profit taking set in. Materials (+2.5%), led by SABIC (+3.5%) and SABIC Agri-Nutrients Co. (+7.4%) led the gains.  The Health Care sector rose by +0.6% as a result of the newly listed stock, Equipment House (+17%). Trading volumes and values increased by +0.8% and +2.4%, respectively. Despite geopolitical uncertainty, TASI has given a healthy 3.3% return in Feb and it has added a whopping 1,393 points (+12.3%) YTD. With oil prices hitting fresh highs (+3.9 DoD) in the international markets, TASI may continue its positive momentum in the coming sessions though volatility in international markets remains a major concern.

 

 

Market Wrap International:

On Tuesday, global shares fell as surging oil prices fueled inflation fears, while investors sought the safety of government bonds, driving rates lower. The S&P500 index fell -1.5%, with the energy sector closing in the black. The Dow Jones fell -1.8 %, while the Nasdaq Composite fell -1.6% and the Russell 2000 fell -2.5%. Fed Chair Powell is scheduled to testify before Congress overnight, attempting to convince legislators that the central bank will act to combat inflation while staying flexible in the face of global uncertainties. In economic data, the U.S. ISM manufacturing survey for February rose to 58.6 from 57.6 previously, beating estimates of a rise to 58. Investors continued to seek the safety of U.S. Treasuries with yields declining across the curve while Fed Fund futures are now pricing +4.6 rate hikes by the end of 2022, down from over 6 in mid-February.

The turmoil in Ukraine continued to weigh on sentiment, causing European shares to fall. The Euro Stoxx 600 fell -2.4%, while the DAX fell -3.8%, the CAC fell -3.9%, and the FTSE100 fell -1.7%, with key European benchmarks all down. The European Union's decision to prohibit seven Russian banks from the SWIFT financial communications system weighed heavily on sentiment, albeit the largest lender, Sberbank, was spared.

Asian markets, in the second session of the week, ended mostly in the green zone. China's stock market closed higher (Shanghai Composite: +0.8%) recording its third consecutive session of gains after data revealed that China’s manufacturing activity unexpectedly rebounded in Feb. The Hang Seng, after declining for three straight sessions, managed to post a recovery rising by +0.2%. In Japan, Nikkei 225 (+1.2%) maintained its upwards trend on optimism over ceasefire talks between Russia-Ukraine. The South Korean market, KOSPI increased by 0.8% while Sensex was closed on Tuesday for a holiday.