Global Stock Market – Nasdaq hits biggest half-yearly gain in 40 years

 

Global Stock Market-Weekly Updates (26-30 June 2023)

 

The major global stock market indexes finished higher during the week that ended on 30 June. The stock market indexes in US, Europe, China, and Japan ended with moderate gains. The market sentiments were upbeat due to the favorable macroeconomic data released during the week.

 

The US Stock Markets – Weekly Updates

 

The US stock market indexes ended higher during the week, as positive growth and lower inflation data lifted the market moods. S&P 500 logged its biggest weekly gains since March end. It was a broad-based rally, with small-caps and value shares outperforming during the week. 

The tech-heavy Nasdaq ended the week with solid gains and jumped around 32% in the first six months of 2023, its biggest half-yearly gain in 40 years. The cool down in inflation and a rally in Apple stock on Friday supported the index to close over 2% during the week. Meanwhile, Apple Inc closed with a $3 trillion market valuation for the first time and closed at record high levels.

The macroeconomic data released during the week in the US showed that the economy is growing at full pace while inflation is cooling. The Core Personal Consumption Expenditure (PCE) price index, the most preferred Fed inflation gauge fell in the month of May, which boosted the market sentiments on Friday. 

The other macroeconomic data released during the week also showed the economy is resilient. The increase in private sector income, a drop in weekly jobless claims, a Michigan survey showed that consumer sentiment is at four-month higher, and Durable goods orders and home sales rose in May supported the markets during the week. 

However, the market upside remained capped as US Fed Chairman Jerome Powell said two more consecutive rate hikes are on the card in the ECB central banker forum, last Wednesday. The strong macroeconomic data has also helped to push the Treasury yields to their highest level since March 9, but were closed with little change on Friday, as investors assessed the inflation data and Fed’s next move.

 

European Stock Market Indexes- Weekly Updates

 

European stock market indexes advanced during the week, as inventors are on hopes that the lower inflation data could mean that interest rates are near the peak. The expectation of a bigger stimulus from Beijing to boost consumption in China also supported the market sentiments during the week.

According to the government survey, the annual inflation in the eurozone slowed for the third consecutive month in June, while the core inflation slightly ticked up. The European Central Bank’s (ECB) annual central bankers Forum was in focus last week, but policymakers were remain hawkish in the event suggesting more rate hikes needed to control the sticky inflation.

Though, ECB President Christine Lagarde accepted that the central bank had made “significant progress” in combating high inflation but said that policymakers “cannot declare victory yet.” She further said that the uncertainty over tight labor markets and large wage increases will influence price means “it is unlikely that in the near future, the central bank will be able to state with full confidence that the peak rates have been reached.”

Bank of England (BoE) Governor Andrew Bailey also said at Forum that UK interest rates are likely to stay higher for longer than financial markets expect.

 

Asian Stock Markets Updates.

 

Asian stock market indexes ended higher during the week following the positive global stock market cues. Investors were encouraged by the strong economic data from the US. The stimulus hope in China to increase consumption also aided the market sentiments during the week. The Indian stock market indexes made a strong rally and ended at record closing levels this week You can read about the Indian stock market weekly updates here.

 

Japan Stock Market

 

Japan’s stock market gained over the week, following positive cues from US markets. The Bank of Japan (BoJ) governor Ueda said in the ECB central banker forum that “Japan’s headline inflation is above 3%, but underlying inflation remains below target, which is the reason for keeping monetary policy easy”

Meanwhile, the core inflation for the Tokyo area, rose slightly higher 3.2% year on year in June, the uptick was less than expected, As Tokyo consumer price rate is above the BoJ’s 2% target for over a year, this is added to pressure on the central bank to tighten its ultra-loose monetary policy.

 

Chinese Stock Market

 

China’s Shanghai index ended slightly higher during the week, as weak economic indicators offset optimism that the government may add further stimulus to boost economic growth. The official PMI Manufacturing data showed slightly improved but remain in contraction. The Industrial profit fell over 18% in the first five months of the current year.

However, the market sentiments slightly improved after Premier Li Qiang, the country’s second-ranking official, said that China is on track to reach its annual growth target of about 5%. While speaking at the World Economic Forum’s annual meeting, Li pledged that Beijing would roll out more practical and effective measures to strengthen domestic demand, boost markets, and support the country’s development and growth.

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

 

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You may also like to read,  Asian markets trade higher despite US Fed’s hawkish comments

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