Global Stock Market: Weekly News & Analysis (25-29 Sept 2023)
Global Stock Market Analysis
The global stock market indexes mostly closed lower during the week. The markets focused on the rising crude oil prices and economic data during the week. The major equity market indexes from the US, European, and Asian stock markets ended lower during the week.
The US Stock Markets – Weekly Updates
The US stock market indexes mostly closed in the red during the week. Dow Jones and S&P 500 ended lower while Nasdaq closed just above the flat line this week. Investors worried about higher crude oil prices in the early three days of the week and its impact on the economy. The yield on the 10-year Treasury note climbed to a fresh high at 4.6% during the week but started declining in the last two trading sessions.
Investors remained concerned about the potential for a government shutdown, as earlier during the week, Moody’s warned a shutdown would negatively affect the government’s credit rating. However, the market sentiments slightly improved in the last two trading sessions of the week due to ease in oil prices and Treasury yields, as analysts are expecting a reduction in supply cuts in the next month’s OPEC+ meeting.
The real US gross domestic product (GDP) grew at an annual rate of 2.1 percent in the second quarter of 2023, according to the final estimate released during the week. On Friday, the better-than-expected Personal Consumption Expenditure (PCE) Price Index, the Fed’s preferred gauge of inflation beat expectations and cheered investors. In August, the Core PCE rose 0.1% MoM basis and 3.9% YoY, lower than July’s reading and economist expectations.
The other economic data released during the week showed, that durable goods orders increased in August as compared to July. The Conference Board’s gauge of U.S. consumer confidence slipped to 103.0 in September, down from an upwardly revised reading of 108.7. The pending home sales fell 7.1% in August due to higher interest rates.
European Stock Market Indexes- Weekly Updates
European stock market indexes ended lower during the week, amid concerns about higher interest rates for a longer period and a weak Chinese economy. The pan-Europe Stoxx 600 index, France’s CAC, Germany’s DAX, and the UK’s FTSE all ended in the red on a weekly basis.
The European Central Bank (ECB) officials including President Christine Lagarde reaffirmed their commitment to maintain a restrictive monetary policy for a longer period to bring back the inflation rate to their set target of 2%. According to flash estimated data, German inflation fell to 4.5% in September, lower than the expectation of 4.6%, while Eurozone CPI inflation dropped to 4.3% in September to its lowest level in two years.
Meanwhile, on Friday separate data showed that the UK’s economy grew faster than expected in April-June 2023. The data showed that the first quarter grew at 0.3%, it was estimated at 0.1%. Its estimate of second-quarter GDP growth remains unchanged. The property market continued to remain slow as per the Bank of England mortgage data.
Asian Stock Markets Updates
The Asian stock market indexes mostly closed lower this week. Investors worried about surges in oil prices and Treasury yields. Indian stock market indexes ended lower for the second consecutive week. You can read about the Indian stock market updates here.
Japan’s Stock Market
Japan’s stock market index Nikkei ended lower this week. The market sentiments were dampened due to concerns about the US interest rate potentially remaining longer than the expectation. The surge in crude oil prices also hit investor’s sentiment.
However, the downside was limited as investors welcomed the Japanese government’s announcement of a new economic stimulus plan details will be decided in October. Meanwhile, ease in Tokyo inflation supported last week’s Bank of Japan’s (BoJ’s) ultra-accommodative monetary policy stance.
The data released on Friday showed that the Tokyo inflation eased and Tokyo Core inflation came better than expected. Separate data showed that Industrial production was flat, while retail sales came better than anticipated in August.
Chinese Stock Market
China’s Shanghai fell during the truncated week as investors preferred to stay sidelined ahead of the weeklong holiday. In the absence of any positive news or any major economic data released during the week, trading activity was quiet in China ahead of the Golden Week holiday. The Shanghai index was closed on Friday and will resume on 9 October due to the Mid-Autumn Festival and National Day.
In Hong Kong, the Hang Seng Index declined during the week despite a sharp rally last Friday.
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