How did Tadawul fare this week?

Tadawul All Share Index (TASI) closed Thursday session 0.6%, or 73 points, higher to 11,730 points, with a trading value of nearly SAR 6.6 billion.

In the oil market, Brent crude increased by 1.35%, or $1.14, while prices remained unchanged at $86.41 per barrel on Friday. Prices jumped 1.35% week-on-week (WoW), 6.55% month-on-month (MoM) and 13.45% on a semi-annual basis.

Prices of West Texas Intermediate (WTI) crude oil jumped on Thursday by over 1%, or $0.84, but slumped by 0.25%, or $0.020 to $81.54 per barrel. Prices jumped 1% WoW, 6.25% MoM and 13.75% on a semi-annual basis.

The Dow Jones Industrial Average grew on Thursday by 0.1%, or 36 points, and fell on Friday by 0.1%, or 45 points, to $39,118 points, recording weekly and quarterly losses by 0.1% and 1.75% respectively, but making monthly and semi-annual gains by 1.1% and 3.8% consecutively. 

As for gold, futures prices for the yellow metal inched up by 1%, or $23.4 on Thursday, and edged 0.15%, or $3 higher to $2,339.6 per ounce, making weekly gains by 0.35%, quarterly gains (3.6%) and semi-annual gains by 9.9%, despite monthly loss of 0.25%.

The Saudi Exchange (Tadawul) ended last week 2% higher, as the market stabilized after a period of decline, mirroring a continued state of uncertainty, said Ahmed Negm, Head of Research Department, XS.com.

This positive performance was spurred by the market close during Eid holiday, as the benchmark opened higher with limited trading along the week.

Rising oil prices may continue to support the market, although the increasing regional tensions could weigh on performance if they escalate. Additionally, the US inflation data has shed light on the market sentiment, causing investors to be cautious before its release.

Technically, TASI  traded near 11,700 points, which echoed a state of uncertainty. If the market trends upwards, it may face resistance at 11,900-12,000, and later at 12,200 points. Conversely, if the index moves downwards, support levels might stabilize at 11,500, followed by 11,200 and 11,000.

Different market sectors showed mixed performance this week. The banking sector, including Al Rajhi Bank and Saudi National Bank (SNB), positively contributed to the market gains. Transport, telecommunications, and finance also performed well. On the other hand, energy delivered a weak performance this week, impacted by the performance of Saudi Aramco, which is currently trading at a support level not seen since late 2022.

Saudi Arabia's trade balance recorded a surplus of SAR 41.4 billion in April, the highest level in a year, marking a 36% increase from the previous month, driven by a rise in non-oil exports. This growth reflects the Kingdom's progress towards the economic diversification, a key goal of Saudi Vision 2030. Additionally, the Saudi Minister of Economy and Planning highlighted the strong expansions of non-oil sectors, currently accounting for 51% of the real gross domestic product (GDP), likely boosting investor confidence.

Furthermore, Saudi Arabia is expected to become the world’s largest construction market as it heavily invests in projects aimed at reforming and diversifying the economy, according to Knight Frank, a real estate consultancy. These developments are expected to positively impact Tadawul, as investors have increased interest in construction and real estate companies, and potentially due to increased lending activity.