Global Stock Market Highlights: Weekly Analysis (Feb 19-23)

 

Global Stock Market Weekly Analysis (19- 23 Feb 2024)

 

The global stock market indexes ended higher for the week ending on February 23rd. The major indexes in the US, Europe, and Asian markets closed the week on a positive note due to the optimism of solid quarterly earnings and strong economic data.

 

The US Stock Markets – Weekly Updates

 

The US stock markets rebounded during the holiday-shortened week. The markets were closed on Monday on account of the Presidents Day holiday. All three indexes, the Dow Jones Industrial Average (DJIA), S&P 500, and Nasdaq Composite index hit a new 52-week high on an intraday basis on Friday. Nasdaq Composite posted the biggest daily gains in about a year on Thursday, post Nvidia’s results.

Nvidia reported its quarterly results on Wednesday after the closing bell. The chipmaker reported strong quarterly revenue and earnings that beat Wall Street’s estimates and raised full-year guidance on solid demand for its AI chips  The US markets rallied on Thursday led by Nvidia, which gained more than 16% and fueled the rise of other tech stocks.

The week showcased very limited economic data and mostly aligned with the expectations. However, the weekly jobless claim was an exception, as it showed fresh signs of strength in the labor market, the number of Americans filing new claims for unemployment benefits unexpectedly fell last week. The flash manufacturing PMI data rose unexpectedly in February while services sector data cooled slightly but remained above 50-mark.

On Thursday, Federal Reserve Board Governor Christopher Waller suggested that policymakers shouldn’t rush to cut rates, citing the strength of the economy and recent inflation data as reasons to exercise patience. The 10-year Treasury yields slightly eased from 4.284% to 4.251% during the week.

 

European Stock Market Indexes- Weekly Updates

 

The major European stock market indexes closed higher during the week ended on February 23rd. The pan-European Stoxx 600 index climbed to a record high. The market sentiments were upbeat due to strong earnings from Nvidia that stoked a global rally and demand for IT stocks. Among the major indexes, France’s CAC, Germany’s DAX, and Italy’s FTSE MIB made substantial gains, while the UK’s FTSE ended flat to the negative during the week.

The HCOB flash PMI data for February suggests that the eurozone economy is stabilizing, as there are improvements in services activity data. The Composite PMI in the eurozone rose to an eight-month high but remained in the contraction zone. In the UK, the composite PMI rose in February as per flash data due to an improvement in customer demand.

The composite PMI for Germany’s economic output declined for the eighth month in a row.  Separate data showed that the final print confirmed Germany’s economy contracted by 0.3% in the fourth quarter. Meanwhile, the German government significantly lowered its economic growth forecast for this year from 1.3% to 0.2%, due to weaker global demand, geopolitical uncertainty, and elevated inflation. 

 

Asian Stock Markets Updates

 

Asian markets mostly closed higher during the week that ended on February 23rd. Indian stock market indexes ended higher for the second consecutive week, supported by strong global cues, you can read the details here. The other stock market indexes in the region Hang Seng, Kospi, Nikkei 225, and Shanghai indexes ended in the green.

 

Japan Stock Market

 

Japan’s Nikkei 225 ended at a fresh record high during the truncated week that ended on Thursday. Japan’s stock market was closed on Friday on account of the Emperor’s Birthday holiday. The market sentiments were strong following a rally in US markets, solid corporate earnings, and a weaker yen that supported the exporters.

The early-week economic data showed that core machinery orders were up in December, having contracted in the previous month. The export data also came higher as it increased second straight month of growth, rising to a record high in January. 

The country’s trade deficit shrank about half of what it was in the last year. However, the flash manufacturing PMI activity data disappointed and remained in contraction, while services activity data softened in February but remained in expansion, i.e. above 50-mark.

 

China Stock Market

 

Chinese stock markets surged as optimism about the recovery increased following robust holiday spending during the previous week’s Lunar New Year holiday. According to the data from the Ministry of Culture and Tourism, the tourism revenue increased 47% during the eight-day Lunar New holiday period. 

The People’s Bank of China (PBoC) injected RMB 500 billion into the banking system via its medium-term lending facility, compared with RMB 499 billion in maturing loans. The loan prime rate (PLR) for 5- years was cut by a bigger-than-expected 25 basis points to 3.95%, marking the largest cut since the reference rate was introduced in 2019, while the 1-year PLR was unchanged.

The new home prices data released on Friday showed it fell 0.3% sequentially in January, marking the seventh straight month of contraction.

 

In Hong Kong, the Hang Seng and South Korea’s Kospi indexes also closed higher during the week. 

 

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