Global Stock Market Weekly Updates (16-20 Jan)

 

Global Stock Market Weekly Updates (16-20 Jan): The major global stock market indexes closed mixed during the week that ended on 20 January. The US markets closed mixed, European markets edged lower while major Asian markets closed in the green during the week. 

 

The US Stock Market indexes- Weekly Updates

 

The key US stock market indexes ended mixed during the week due to recession fear. The Dow Jones and S&P 500 closed lower and gave up a portion of their strong rally of the previous two weeks. The technology-driven Nasdaq index ended marginally higher for the week.

The market sentiments were hit as the economic data released during the week showed that retail sales and industrial production fell in December. The weekly jobless claim fell to its lowest level since April 2022. The Producer Price index also fell to its lowest level since April 2020. The Housing start and existing home sales fell a bit less than expected. 

The hawkish comments made by the US Fed officials after economic data indicate an aggressive rate hike would continue in 2023. This spooked investors, as further aggressive rate hikes could push the economy into a recession. However, Friday’s rally due to solid corporate earnings boosted the market sentiments and helped Nasdaq to close higher for the week.

 

European Stock Market Indexes- Weekly Updates

 

European stock market closed marginally lower for the week, as sentiments were dented after the European Central Bank (ECB) policymakers indicated that an aggressive rate hike will continue, this worried investors about a slowdown in the economy for a longer period.

ECB President Christine Lagarde clarified that the fall in energy prices doesn’t mean a slow pace of monetary policy tightening. While speaking at World Economic Forum in Davos, she was confident that ECB would bring back the 2% inflation by taking monetary policy tightening measures.  Investors worried as the minutes of the last ECB meeting suggested that the forthcoming rate hike could be much higher.

The economic data released in the UK showed that inflation has declined for a second consecutive month in December 2022 due to lower gasoline prices. The job markets remained strong, the unemployment rate was close to a record low in the three months to November. The Bank of England (BoE) governor said that he is expecting a “long but shallow recession” in the UK this year.

 

Japan’s equity market – Weekly Updates

 

Japan’s stock market advanced during the week as the sentiment remain optimistic by China’s reopening and hopes that major central banks would slow down their interest rate hikes due to a decline in inflationary pressure. The market sentiments got further boosted after the Bank of Japan (BoJ) unchanged the monetary policy in their last week’s meeting. However, the upside remained capped as Core CPI inflation rose in December at a 41-year high.

 

Chinese Equity Markets- Weekly Updates

 

Chinese stock market ended higher for a fourth consecutive week ahead of a weeklong holiday on account of the Lunar New Year. The Chinese markets gained due to better-than-expected economic growth. The GDP growth released last week missed the official forecast but was much better than economists forecast. The retail sales and industrial output in December also came better than expected.

Meanwhile, the People’s Bank of China (PBOC) has kept its 1-year and 5-year loan prime rates unchanged for a fifth consecutive month. However, the upside remained capped, as the other data showed that new home prices fell in December compared to the same period of the previous year.

 

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