world markets

World markets gain despite flurry of headwinds

327 views

Trading in the world markets took place against the background of the continuation of hostilities between Russia and Ukraine, for the fourth week. It was also affected by rising energy and commodity prices and anxiety over how aggressive the US Federal Reserve will be in combatting the elevated inflation pressures following  comments from Fed Chairman Jerome Powell this week who said he could not rule out a 50bp hike at future FOMC meetings.


Hover Over A Country To See Key Data And Over A Black Round Marker To See The Indices. Click On The Plus Or Minus Sign To Zoom In Or Zoom Out. Select The Home Button To Get The Map Back To Its Original Size


AMERICAS

CANADA

The Canadian market gained for the week, its sixth weekly gain in succession. The benchmark S&P/TSX Composite Index rose 0.86% as optimism about growth outweighs concerns about geopolitical tensions and tighter monetary policies from central banks.
In economic news, manufacturing sales in Canada increased 3.7% in February data from Statistics Canada showed.

US

The major benchmarks were higher. For the week, the Dow Jones added 0.3%, while the S&P 500 grew 1.8% and the Nasdaq jumped 2%. Those results marked the second positive week in a row for stocks despite growing expectations of steep interest-rate increases ahead.

Investors also digested some mixed economic news.  Weekly jobless claims fell to a fifty-year low and PMI figures hit an 8-month high. Manufacturing PMI came in at 58.5 vs. 56.6 expected and Services PMI at 58.9 vs. 56 expected. Pending home sales unexpectedly fell by 4.1% month-over-month n February, versus estimates of a 1.0% rise.

LATAM

In Brazil, the BOVESPA jumped 3%. Brazil’s central bank raised its inflation forecast for this year and 2023 due high commodity prices while maintaining its forecast for economic growth at 1% in 2022 as the jobs market performed better than expected. Central Bank President Roberto Campos Neto confirmed that the monetary authority plans to end the cycle of monetary tightening in May – with another one percentage point increase in the key interest rate to 12.75% per year – and said that the scenario that foresees a new peak of Selic in June is the “least likely.”

ASIA/PACIFIC

JAPAN

Japanese stock markets rallied throughout the week as  sentiment was boosted by expectations of further economic stimulus. BoJ Governor Haruhiko Kuroda said that it is too early for the BoJ to change its dovish stance. Members of the Bank of Japan’s Monetary Policy Board said that Japan’s economic recovery is continuing at a satisfactory pace in the wake of the COVID-19, minutes from the bank’s January 17-18 meeting revealed on Thursday.

CHINA

Chinese markets weakened as concerns about the fate of U.S.-listed Chinese companies continued to dampen sentiment. Chinese regulators have asked some of the country’s U.S.-listed firms to prepare for more audit disclosures, Reuters reported, citing unnamed sources. This comes as China’s regulators are considering a proposal to allow their U.S. counterparts to inspect audit working papers of some Chinese firms that do not gather sensitive data, two of the sources said. However, analysts noted that it remained unclear if the talks between regulators on both sides would materialize into anything concrete. In other news, Chinese president Xi called for cooperation with the US to end the Russia-Ukraine conflict.

AUSTRALIA

The Australian market finished the week in green territory with the ASX200 up 1.53%. Energy and mining stocks were the big performers for the week with both sectors up more than 5% as booming commodity prices continue to lift the ASX. Financials and healthcare stocks underperformed on Friday amid expectations for higher interest rates. The manufacturing sector in the country continued to expand in March, and at a faster pace, the latest survey from S&P Global showed on Thursday with a manufacturing PMI score of 57.3.

EUROPE

EUROZONE

Equities in the Eurozone fell as the war in Ukraine kept investors jittery, stoking concerns over slowing growth and high inflation.  The pan-European STOXX Europe 600 Index was off 0.23%.
Germany’s DAX Index lost 0.74%, while France’s CAC 40 Index retreated 1.01%. Bucking the trend, Italy’s FTSE MIB Index advanced 1.39%.

Western countries agreed at several summits in Brussels to impose more sanctions on Russia, reinforce troops on European borders and provide more military support for Ukraine. On the data front, Eurozone’s consumer confidence in March tumbled to a low not seen since May 2020 due to high inflation and war.” The drop from -8.8 to -18.7 takes consumer confidence down to levels previously associated with recessions” ING said.

CEE

In Poland, the stocks as measured by the WIG20 returned 0.78%. US President Joe Biden traveled to Poland to meet with Polish President Andrzej Duda, visit U.S. troops deployed along NATO’s eastern fringe and to laud Poland’s humanitarian role in welcoming more than 2 million Ukrainian refugees. In Hungary, the BUX was higher by 0.11%.Just over a week ahead of the 2022 Hungarian parliamentary elections, all recently conducted polls show the lead of Prime Minister Viktor Orbán’s Fidesz party. According to Orban sanctions  on Russia’s energy sector   “would mean the Hungarian economy would slow down and then stop within moments”. Unlike other EU countries bordering Ukraine, Hungary has declined to supply its neighbour with weapons and has refused to allow weapons shipments to cross its border into Ukraine.

REST OF EUROPE

In Russia, almost a month after the market closed, trading partly resumed on Thursday. When the market reopened, only 33 stocks (out of several hundred) were allowed to trade, under heavy restrictions and the Russia Trading System Index sank 9%. On Friday, it plunged 2.70%. The market, is down 20% from the day before the military intervention in Ukraine, and more than 30% lower since the start of the year.

In the UK, London’s premier index, the FTSE 100 advanced 1.06%. UK’s inflation accelerated to 6.2% in February, the highest inflation rate since March of 1992, putting pressure on the Bank of England to continue raising interest rates. Soaring food, fuel and energy costs continue to deepen the country’s cost of living crisis.

In Switzerland, the SMI was lower by 0.52% over the week with investors largely staying cautious and refraining from making significant moves amid worries about the economic impact of the ongoing war in Ukraine and looming interest rate hikes.

MIDDLE EAST

(Note trading between 20-24/03/2022)

In Israel, trading in the Tel Aviv Stock Exchange (TASE) in the fourth week of March was marked by increases in the leading share indices, similar to the trend in leading stock exchanges worldwide. The TA-35 index increased by 3.85%  bringing year-to-date cumulative gains to 3.0% This is according to the information contained in the weekly stock market report, released by TASE.

Saudi stock market generated positive returns for the week. The TASI climbed 1.40% as oil prices surged. as investors weighed the possibility of EU sanctions on Russian energy imports, leading to renewed supply worries. “Global uncertainties weigh on investors’ expectations while local events such as IPOs and strong fundamentals provide a balance,” Miguel Rodriguez, Chief Market Analyst, MENA, at CAPEX.com told Reuters on Thursday.

AFRICA

In South Africa, the JSE Top 40 fell 1.02% this week. In currencies, “the SA rand has been remarkably resilient despite uncertainties caused by Russia’s war on Ukraine and the hawkish policy path set by the U.S. Federal Reserve,” said Nicky Weimar, chief economist at Nedbank, in a note to clients. “Apart from exposure to commodities, South Africa offers deep financial markets, cheap valuations, sound monetary policy, and at least somewhat improved fiscal metrics when compared with other large emerging market economies such as Russia, Turkey, and even Brazil and other Latin American countries,” she said.

In Nigeria, stocks as measured by the NGX All Share Index returned -0.67%. On Tuesday, Nigerian Exchange Limited highlighted the value of sound corporate governance as the foundation that creates transparency and establishes the trust required to keep the global financial system running.


Content Disclaimer:
This page has been prepared for informational purposes only. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.


For any comments, suggestions or corrections email: kbalkoudi@worldmarketsdaily.com

Kyriaki Balkoudi is a markets editor for World Markets Daily. She has a bachelor’s degree in Balkans Studies from Aristotle University of Thessaloniki, Greece and a master’s degree in International Politics from City University London, UK.


References:
“Global Markets Weekly Update”. T. Rowe Price. March 25, 2022
“Weekly market wrap”. Edward Jones. March 25, 2022
“Weekly Market Recap”. John Hancock Investments. March 25, 2022
“Schwab Market Update”. Charles Schwab. March 25, 2022
“Market Analysis”. Edmond de Rothschild. March 25, 2022


Read previous week’ s WM Review
Read all WM Weekly Reviews
Read about world stock exchanges CEOs, insights, events & more
Read South East Europe’s Weekly Reviews