Global stock markets end higher as the banking crisis eases- Weekly Updates
Global Stock Markets-Weekly Updates (27- 31 March 2023)
The global stock markets indexes closed higher during the weeks that ended on 31st March. The major indexes in the US, Europe, Japan, and China posted strong gains in the last week of the first quarter of 2023, as the global banking crisis eased and positive economic data.
The US Stock Markets
The US stock market indexes made solid gains during the week. The smallcap indexes outperformed the large-caps and value stocks and advanced slightly more than growth stocks. Energy stocks rallied during the week due to a gain in crude oil prices.
The US market sentiments improved after the report that First Citizen Bank agreed to buy the larger parts of collapsed Silicon Valley Bank. the market sentiments got further boosted after the Biden administration released a set of proposed new regulations for mid-size banks having assets between USD 100 billion and USD 250 billion.
Banking stocks which fell sharply after the collapse of Silicon Valley Bank (SBV) and Signature Bank in the first week of march rebounded and eased investors’ fear.
Though it was a relatively quiet week for economic data releases and financial news, the market got some encouraging news on the inflation front on Friday. The U.S. core (excluding food & energy) personal consumption expenditure (PCE) price index for February came lower than expected.
A slightly downward revision of US Core PCE and GDP reading and higher-than-expected jobless claims have cheered the markets, as investors now expecting a potential pause in Fed interest rate hikes in the upcoming meeting.
European Stock Markets
European stock market indexes rallied and major indexes posted strong weekly gains, as fears of the global banking crisis eased. Deutsche Bank rebounded and gained as much as 5%, after a sharp fall in the previous week due to the news of credit default swaps jumped.
The market sentiments got further boosted by the positive economic data during the week. The annual consumer price growth in the euro area slowed to 6.9% in March from 8.5% in February due to lower energy costs. However, the core rate excluding food and energy price came slightly higher in February. The unemployment rate was almost steady in the Euro area.
The UK avoided a recession in 2022 as the revised official data showed that fourth-quarter GDP grew at 0.1% instead of the earlier estimated of being flat. Meanwhile, the latest data showed that the UK housing market remained weak in March.
Asian major stock markets indexes
Japan’s Nikkei posted solid gains during the week. The market sentiments were upbeat as the recent global banking crisis eased and as the latest economic data suggest a pause in Fed’s rate hike. On the domestic front, the core consumer price inflation in Tokyo declined for the second consecutive month but remains above the central bank’s target.
China’s stock market indexes advanced due to strong economic data released during the week. The supportive comments from Beijing and the IMF’s projection of China’s economic growth at 5.2% also boosted the market sentiments.
China’s official Manufacturing and Non-Manufacturing PMI data released during the week rose better than expected in March while industrial profits fell first two months of 2023.
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