Global Stock Market Weekly Recap: Trends and Analysis (1-5 April 2024)
Global Stock Market Weekly Analysis (1 – 5 April 2024)
The major global stock market indexes mostly closed lower for the week ending on April 5th. The US and European stock market indices closed in the red, while Asian market indices, ended mixed this week.
The US Stock Markets – Weekly Updates
The stock market indexes in the US closed higher on Friday, but that’s not enough to end the week on a positive note. As June rate cuts faded, all three major indices- Dow Jones, S&P 500, and Nasdaq closed the week in the red. Energy stocks performed well due to a surge in crude oil prices. The oil prices reached their highest level in the last six months due to fresh geopolitical tension between Israel and Iran, and as OPEC members maintain their production limits despite tight markets.
On the economic front, the market sentiments turned negative after the ISM Manufacturing PMI index rose unexpectedly in March pointing to strength in the US economy but faded investor’s hope of June interest rate cuts. The JOLTs job opening rose in February, compared to January, but remained slightly below expectations. The ADP employment report showed that the US private sector has added more than expected jobs in March
The strong manufacturing activity and Job reports dented the US market sentiments during the week. Several Fed officials, from time to time delivered their hawkish speeches during the week. Suggesting, that the Fed should not hurry to cut interest rates, pointing to a stronger economy and inflation picking up in the first two months of this year.
This pushed the Treasury yield higher, the yields on the 10-year Treasury notes climbed to 4.406% from the previous week’s close of 4.205%. The chances of June rate cuts also eased from 65% last week to 53% on Friday.
However, the downside of US markets was limited as the ISM Services activity data slowed to a three-month low and came below economist expectations. The much-awaited monthly job report showed that the US economy added more than expected jobs in March. The unemployment rate also declined compared to the prior month, but the good part was, that average earnings were in line, with the expectation.
European Stock Market Indexes- Weekly Updates
European stock market indexes closed lower during the week, that ended on 5th April. The pan-European Stoxx 600 index closed lower by more than 1% from its previous week’s record high close, snapping a 10-week winning streak. The key indexes, CAC, DAX, and FTSE 100 declined due to US Fed official’s hawkish comments and surging crude oil prices.
The flash inflation data for March showed that the retail inflation rate declined more than expected. The core inflation, excluding food and energy also slowed in March. The Eurozone business activity has started picking up, as per the latest data released the S&P Global Composite PMI, which includes manufacturing and services activity rose more than the 50 mark.
The UK’s housing market recovery started picking up, as per the data released by the Bank of England. The data showed the net mortgage approvals reached their highest monthly levels since June 2022, increasing 60,400 in February from 56500 in January.
Asian Stock Markets Updates.
Asian stock market indexes closed mixed for the week ending April 5th. The stock market indexes of India, China, and Hong Kong ended higher, while the indexes, in Japan and South Korea closed in the red. The negative sentiments from US markets and geopolitical tension dented the market sentiments, while strong economic data from India and China supported the local indexes.
Japan Stock Market
Japan’s Nikkei 225 closed sharply lower during the week ending on April 5th, as investors were concerned about the geopolitical tension and uncertainty about the US Fed interest rate cuts, in June. The Japanese currency hovered around the 151 level against the U.S. dollar, its lowest level in about 34 years. Investors are also concerned and guessing about the authorities to take steps and support the yen, even though the weakness in the yen supports the exporters.
China Stock Market
China’s Shanghai index ended higher during the truncated week that ended on Wednesday, 3rd April. The sentiments remain upbeat, as the latest manufacturing PMI data added evidence that the Chinese economy is gaining traction. The official manufacturing PMI data rose above expectations in March, due to a rebound in production and exports. The non-manufacturing activity also grew better than expected in March.
However, the market upside was capped as China’s property sector is still a concern. China’s new home sales declined in March compared to the same period, last year. The decline in property sales impacts large developers and this stocked liquidity crisis and developers failed their loan repayment commitments.
In Hong Kong, the Hang Seng indexes were closed higher, while South Korea’s Kospi ended in the red during the week.
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