Global Stock Market Indexes-Weekly Updates
Global Stock Market Indexes-Weekly Updates: The major global stock market indexes closed lower for the week ending 16 December. The equity benchmarks of the US, Europe, China, and Japan declined during the week as the markets were focused on US inflation and Fed policy outcome.
The US Stock Market indexes- Weekly Updates
The hawkish comments from the US Federal Reserve Chief over rising interest rates for a longer period pushed the US markets lower for a second consecutive week. Almost all major sectoral indices closed in the red with the exception of energy, due to a rebound in oil prices.
The US markets focused on two major announcements during the week, and the traders reacted exactly the opposite. The US markets reacted positively after the cooler-than-expected CPI inflation announcement on Tuesday in anticipation that Fed would slow down interest rate hikes. The markets fell sharply after the announcement of the Fed’s policy outcome on Wednesday.
While, as widely expected, the Fed slowed its pace of rate increase but indicated that ongoing rate increase will continue in 2023 to curb inflation. Further, the disappointing US retail sales data on Thursday renewed concerns about the global recession among investors. Investors preferred to book profit in stocks and invested in Exchange Traded Funds (ETFs) as trading in ETFs reached at record levels in mid-week.
European Stock Market Indexes- Weekly Updates
European stock market indexes fell sharply after the central banks indicated that more interest rate hikes are on the card in the next year 2023 to tame inflation. Though the European Central Bank (ECB) has reduced the size of interest rate hikes as widely expected.
The S&P Global flash PMI survey showed that the downturn of eurozone business activity would continue for the sixth consecutive month in December. Bank of England (BoE) also hiked its key interest rate for the ninth consecutive month to a 14-year high and cut the economic growth forecast that was estimated in November.
Japan’s equity market – Weekly Updates
Japan’s stock market index fell during the week as investors’ risk appetite suffered after the US Fed presented a hawkish than anticipated monetary policy outlook. The continued monetary policy tightening by the central banks has renewed the concerns about global recession among investors.
Japan’s government finalized its tax revision package. The latest PMI data showed that there is an expansion in the services sector while manufacturing activity suffered in December.
Chinese Equity Markets- Weekly Updates
Chinese stock market index fell due to weaker-than-expected economic data released during the week. However, the remarks from Vice Premier Liu He indicated that Beijing is considering new measures to support the property sector. Industrial production in November rose at the slowest pace since May while retail sales declined. Fixed asset investment for the year through November also missed the forecast.
However, the market downside was capped as China recently lifted some of its covid restrictions. Further support from the People’s Bank of China (PBOC) injecting higher than expected CNY 650 billion into the banking system will maintain sufficient liquidity in China’s financial system.
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