Tadawul Review:

Tadawul All Share Index (TASI) remained unchanged on Thursday to close at 12,292 levels ending the first week of August with a gain of +92 points (+0.8%). The index opened flat on Thursday with the market fluctuating between the levels of 12,244 and 12,329, a range of 86 points. In general, 15 out of 20 sectors closed in the green zone, while 135 stocks rose and 69 fell. The Telecom sector provided stability to the index increasing by 1.1% while the Materials (-0.4%) and Energy (-0.3%) sectors were a drag on the index. Amongst the stocks, SABIC (-1.6%), Aramco (-0.4%), and Saudi National Bank (-0.6%) put the index under pressure. Meanwhile, the shares of Naseej Company and Red Sea Company were the biggest gainers of the day closing at +9.6% and +9.1% respectively. Trading activity witnessed a decline in the volume and value of trading by -8% and -13%, respectively, from the closing level of the previous session, to reach 184mn shares and SAR6.7bn. Brent oil prices declined by -1.6% DoD (USD 95.3/bbl) due to a build-up in US crude stocks forcing TASI investors to remain cautious on Thursday. Going forward, the stability of the market is likely to be associated with oil price direction as investors weigh tight oil supply against fears of a global recession. 

 

Market Wrap International:

The global equity markets underwent a volatile session with investors’ newfound worries over the upcoming Fed policy decision and excitement over strong economic data and the ongoing earnings season. The economic data in the U.S (employment, wage growth, consumer credit ) surprised consensus expectation on the upside and corroborates the latest Fed’s assessment that the economy may absorb one more jumbo hike without risking a deeper recession. This, combined with the latest assessment of BOE on inflation, sent treasury yields on both sides of the Atlantic up. The benchmark indices in the U.S moved sideways with S&P 500 Index dropping by a meager 0.2% while Nasdaq Composite dropped by 0.5%.

The already fragile sentiment in the European indices in the context of the latest BoE assessment was further hit by the latest updates in the U.S markets and the fears of a continued hiking cycle by the ECB to support the Euro against the USD. The Stoxx Euro 600 index fell by 0.8% with real estate and tech names leading the decline while banks outperformed on expectations of interest rate hikes which may support banks’ earnings.

In Asia, indices broadly bounced back as investors led by tech and material as investors focused on earnings announcements and undervaluation. Taiwan’s TAIEX was the sole outperformer in the region (+2.3%) while Shanghai Composite in China (+1.2%) also made a notable move. Other indices in the region jumped 0.1-0.9%.