Global Stock Market Weekly Analysis: Mixed Closures and Inflation Focus

August 12, 2023 admin

Global Stock Market Weekly Analysis

Global Stock Markets-Weekly Analysis (7-11 Aug 2023): The global stock market indexes closed mixed during the week. The world markets mainly focused on the inflation data during the week. The indexes in the US, Europe, and Asian markets ended on a mixed note.

The US Stock Markets

The US stock market indexes ended mixed during the week, Dow Jones ended higher while S&P 500 and Nasdaq finished in the red. Investors weigh the inflation data against the concern about the recent rise in interest rates. Market volumes were light due to the summer holidays and value stocks outperformed the growth stocks, especially after the inflation data was announced.

Healthcare stocks got boosted while IT stocks tumbled on worries about rising interest rates will reduce the value of future profits. Heavy sell-off was witnessed in Financial stocks on Tuesday after Moody’s Investors Services downgraded 10 regional banks’ credit ratings.

On the economic front, the US markets opened a gap-up on Thursday after the CPI inflation data came better than expected in July. While the enthusiasm for the CPI data faded on Friday after the release of the Producer Price Index (PPI) reading. The US benchmarks closed mixed after the PPI rate came to a tick higher and above expectation on Friday.

Two Fed officials made a hawkish comment after the CPI inflation data was released dented the market sentiments. The yields on US benchmarks 10-year-old Treasury note ended higher to 4.154% on Friday from 4.046% on the previous week’s close.

European Stock Market Indexes

The pan-European Stoxx 600 index ended with little change during the week. The major European stock market indexes ended on a mixed note, as Germany’s DAX, UK FTSE, and Italy’s FTSE MIB closed lower while France’s CAC ended higher this week.

A sharp fall in banking stocks was witnessed across the region after the Italian government announced a 40% windfall tax on interest earned by the banks. Though It was later clarified saying it would cap any levy at 0.1% of risk-free assets, stocks rebounded the next day.

The UK‘s GDP grew 0.5% sequentially in June, strong than expected, as the expectation was a 0.2% expansion. In the second quarter, GDP grew at 0.2% compared to a 0.1% expansion in the first quarter. Meanwhile, the housing markets weaken further as per the Halifax survey data showed this week.

Asian Stock Markets Updates.

The Asian stock market indexes also ended mixed during the week, due to volatility in US markets and weak economic data released in China. Indian stock market indexes ended the week marginally lower and extended losses for the third consecutive week. You can read about the Indian stock market weekly updates here.

Japan Stock Market

Japan’s stock markets ended the holiday-shorten week on a positive note. Nikkei gained this week due to an optimistic earnings forecast from some major Japanese companies. The tourism-related stocks got a boost after China agreed to lift the restrictions on group tours for Japanese citizens.

The economic data released during the week boosted the investors’ sentiments. The ease in inflationary pressure and slowing wage growth supported the market.

Chinese Stock Market

Chinses stock market indexes fell sharply this week. July’s inflation and Producer Price data fell for the first time since November 2020, indicating a weak demand in the Chinese economy.

The CPI inflation showed that China entered into deflation while Producer Prices fell worst than expected. Trade data released during the week also remains weak as exports fell larger than expected. Meanwhile, the new bank loan rose lower than expected in July dampening the market sentiments.

Hong Kong benchmark, the Hang Seng index closed lower during the week.

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