world markets

Ukraine continues to dominate market sentiment

384 views

World stocks started Q2 off in a mixed fashion amid resiliency in the face of continuation of hostilities between Russia and Ukraine, for the fourth week, higher inflationary pressures and a potentially more aggressive U.S. Federal Reserve. Peace talks between Russia and Ukraine have yielded little fruit thus far. However, the two sides are set to continue talks. Volatility is expected to continue until there is more clarity on the geopolitical front.


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

Canadian markets fell over the week. The benchmark S&P/TSX Composite Index was off 0.24% On the economic front, the IHS Markit Canada Manufacturing PMI rose to a fresh all-time high of 58.9 in March of 2022, from 56.6 in February, the 21st month in a row with the reading above the 50 threshold.

US

It was a mixed week for US indices. The Dow edged down by 0.1% while the Nasdaq advanced by 0.7%. The S&P 500 inched up by 0.1% and closed out its best month since December but its worst quarter since early 2020. Investors digested the Labor Department’s closely watched monthly jobs report which showed the U.S. economy generated 431,000 jobs in March, the eleventh month in a row that gains have exceeded 400,000. The job growth contributed to a drop in the unemployment rate, which dipped to 3.6% in March but inflation and supply chain challenges continue.

The government reported on Thursday that the personal consumption expenditures price index increased to 5.4%, excluding food and energy prices. The Biden administration also announced an extended release from the nation’s Strategic Petroleum Reserve to combat inflationary pressures.

LATAM

In Mexico, the IPC was up 2.12%. The country’s Finance Ministry said it will issue MXN550 billion ($27.7 billion) in government bonds through the end of June. The ministry “is looking to satisfy [the government’s] financing needs preferably in the local market” through bond auctions from April 5 to June 30, it said in a press release on Friday. In January, the ministry sold MXN133 billion worth of government bonds that mature between 2022 and 2050 to repurchase notes.

In Brazil, B3’s BOVESPA jumped 2% this week. After a 35% drop in 2020, the profits of companies listed on the B3 more than tripled in 2021, according to financial information consultancy Economatica. Meanwhile, unemployment in Brazil was 11.2% in February while the country’s oil production was up 3.5%. Brazilian President Jair Bolsonaro appointed Adriano Pires as chief executive of state-run oil company Petrobras, effectively ending the tenure of current CEO Joaquim Silva e Luna less than a year after he was appointed.

ASIA/PACIFIC

JAPAN

Japanese stocks retreated. Sentiment among big Japanese manufacturers fell in the first quarter for the first time since Covid-19 struck, the Bank of Japan’s (BoJ’s) Tankan survey of business confidence showed. Japan and the US will communicate closely on Forex issues, Japan’s top currency diplomat said on Tuesday in his strongest statement yet since the yen’s decline to six-year lows against the dollar. The yen has lost almost 7% against the greenback so far this year. Japan’s government also announced that it would begin work on additional measures to boost the economy.

CHINA

In mainland China markets gained for the week, as investors anticipated that Beijing would step in to support the country’s economy and markets. Data released Thursday showed Chinese factory activity shrinking in March. The manufacturing PMI was 49.5, or in line with estimations, and down from 50.2 in February. Non-manufacturing PMI was 48.4, or lower than the 50.3 estimated and 51.6 in previous month. The slowdown in China bodes ill for Asia, which is host to big manufacturers dependent on consumption in the world’s second-largest economy, analysts say.

AUSTRALIA

Australian stocks as measured by the ASX200 index returned 0.57% this week led by iron ore and lithium stocks rallying as miners benefited from a rise in iron ore prices. The local bourse rose 6.4% for the month of March, the market’s best performance since November 2020. Treasurer Josh Frydenberg on Tuesday outlined his economic blueprint for the next fiscal year with an eye to elections that must be held by May 21. Prime Minister Scott Morrison is set to announce as early as next week an election date.

EUROPE

EUROZONE

European stocks gained ground in a choppy week of trading with the pan-European STOXX Europe 600 Index advancing 1.06%. Equities also came off their first losing quarter in two years after closing Thursday’s session down 6.3% since the start of the year. On the macro front, consumer price inflation in Germany hit 7.3% in March, the most since 1981 and well above market expectations of 6.3%. The main upward pressure should come from energy products, food and services.

Eurozone inflation also accelerated to a record high in March, rising 7.5% from 5.9% a month earlier, flash data from Eurostat showed. The rate was also above the economists’ forecast of 6.6%. European Central Bank (ECB) President Christine Lagarde, Vice President Luis de Guindos, and Chief Economist Philip Lane expressed caution about the macroeconomic outlook.

CEE

In Poland, markets generated positive returns with the WIG20 up 2.33%. The country, which is already broadly independent of Russian supply, will take measures to become independent of Russian oil and gas by the end of 2022 according to Polish Prime Minister Mateusz Morawiecki.

In Hungary, equities were higher ahead of April 3 general elections with the country’s prime minister, Viktor Orbán, seeking a fourth successive term. The BUX index jumped 2.39% this week.
The election has been overshadowed by the war in neighboring Ukraine. Orban has backed EU sanctions against Moscow, but refuses to allow weapons headed to Ukraine to transit through the country.

REST OF EUROPE

In Russia, stocks as measured by the dollar-denominated RTS index returned 24.58%. The country partly lifted the short-selling ban on local stocks on Thursday, removing one of the measures that helped limit the declines in the market after a month-long shutdown. The Bank of Russia also said equities trading hours will be extended from a shortened four-hour session to the regular schedule of 9:50 a.m. to 6:50 p.m. Moscow time. The Russian market is gradually reopening and returning to normal. Since reopening last Thursday Russian stocks have gained over 9%.

In currencies, the Russian ruble enjoyed a strong rebound against the euro and touched a more than five-week high in early Moscow trade on Friday before settling in the 83-84 range to the dollar. The moves come as Russian President Vladimir Putin signed a decree stipulating that foreign buyers must pay for Russian natural gas in rubles from April 1 onward. In oil market news, OPEC+ sources said on Wednesday the producer alliance which includes Russia was likely to stick to its existing deal to gradually increase oil production.

In the U.K, the FTSE 100 Index climbed 0.73%. The UK economy grew more quickly than previously thought in the final quarter of 2021, reflecting the revisions across the service sector. The rate of expansion was revised higher to 1.3% from the initial estimate of 1% data from the Office for National Statistics showed. However, a survey from the Institute of Directors showed business sentiment plunged last month because of deteriorating economic conditions.

In Switzerland, stock market returns were positive for the week. The benchmark SMI returned 0.47%. Swiss consumer price inflation rose to the highest since October 2008, rising 2.4% year-on-year in March, following a 2.2% increase in February, data from the Federal Statistical Office showed.

MIDDLE EAST

(Note: Trading between 27-31/03/2022)

Trading in the Tel Aviv Stock Exchange (TASE) in the last week of March was marked by decreases in most of the leading share indices. The benchmark TA35 index decreased this week by 0.7%, bringing year-to-date cumulative gains to 2.2%. TASE published its first ESG Report where it specifies its goals and commitment to various economic, corporate governance, social and environmental aspects and maps the 13 most material topics within and outside the organization as a strategic foundation for the Company’s ESG activity.

Saudi Arabia’s benchmark TASI gained 1.10%. The index has risen 15.7% for the quarter. The Gulf region has been an investor favorite over the past week since state utility Dubai Electricity and Water Authority (DEWA) opened for subscription.

AFRICA

In South Africa, the Johannesburg Stock Exchange (JSE) Top 40 jumped 2.01%. Of note, In just three months after the JSE received a license to open a platform for private market capital raising, it has attracted more than R5 billion in potential investments. JSE Private Placements (JPP), an online platform, allows private investors to buy stakes or bonds in specific projects. In other news, Moody’s has upgraded South Africa’s outlook from ‘negative’ to ‘stable.’

In Nigeria, the NGX All Share Index fell 0.26% this week. The benchmark index was forced to its weakest level since the end of January on Friday and concerns were raised about investors worsening disposition to equity investment, evident in the lower volume of transactions in recent times.


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. April 1, 2022
“Weekly market wrap”. Edward Jones. April 1, 2022
“Weekly Market Recap”. John Hancock Investments. April 1, 2022
“Schwab Market Update”. Charles Schwab. April 1, 2022
“Market Analysis”. Edmond de Rothschild. April 1, 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