Dubai:Saudi Arabia’s Tadawul index reversed most of its intra-day losses in the last hour of trading yesterday, even as investors initially brought the market lower over possible repercussions resulting from Saudi Arabia admitting Friday that journalist Jamal Khashoggi was killed.
Investors are concerned of possible sanctions against the country. The Tadawul fell 3.3 per cent to a low of 7,403.79, only to erase most of its losses in the last hour of trade before closing 0.15 per cent lower at 7,648.64.
“There was pressure on the equity market and we saw that in the first half of the session. But it was phenomenal to see a sharp recovery in the last half-hour of trade. And this has been the trend over the last several sessions,” said a fund manager at an asset management firm who did not wish to be named.
In the week to October 18, foreigners were net sellers on the Tadawul despite buying activity on the part of Saudi institutions. Foreigners sold a net of 4 billion Saudi riyals (Dh3.91 billion) in securities, while local institutions bought stocks worth about 7.8 billion riyals.
Despite volatile movements, the Tadawul has managed to recover from the losses that it registered last week. The index is just 186 points below the level from which the sell-off started last week at 7,834 on October 10.
“There is still a layer of investor uncertainty around the reactions from different world leaders that is encouraging the mixed performance in the Saudi index, and it wouldn’t be a surprise if this momentum continues to show the same form until the conclusion of the upcoming Saudi Investment Summit,” said Jameel Ahmad, global head of Currency Strategy and Market Research at FXTM.
The investor summit is scheduled to run from October 23 to October 25.
Elsewhere, the UAE’s indices bucked the Saudi trend, but were ranged. The Dubai Financial Market (DFM) general index closed 0.44 per cent higher at 2,747.39 while the Abu Dhabi Securities Exchange (ADX) general index closed 0.27 per cent higher at 4,956.19.
The trend was positive among the emerging markets as well, with the MSCI Emerging Market index closing 0.85 per cent higher at 979.69.