Equities Weekly: Investor sentiment supported amid continued upbeat US economic data

Global equities, as represented by the MSCI AC World Index, registered a gain of 2.04 per cent over the week ended December 9, 2016 as investor appetite improved due to further upbeat US economic data released over the week.

Amongst developed market equities, Europe’s Stoxx 600 Index led the pack with a 2.45 per cent weekly gain, followed closely by US’s S&P 500 Index which gained 2.04 per cent over the week, and lastly, Japan’s Nikkei 225 Index which gained 0.70 per cent when the week ended.

Over in emerging markets, performances did not disappoint as well, with the MSCI Emerging Markets and MSCI Asia ex Japan indices ending 1.96 and 0.86 per cent higher respectively.

In East Asia, China’s offshore equity market, as represented by the HSML 100 Index, was met with a loss of 0.75 per cent, while its onshore counterparts, the Shanghai Composite Index and the Shanghai Shenzhen CSI 300 Index, fell by 1.78 and 2.43 per cent respectively over the week.

Negative sentiments were also spread over to the Hong Kong’s equity market, which saw its benchmark HIS Index ending the week 0.11 per cent lower.

Better performances were witnessed amongst other East Asian equities, as Taiwan’s TWSE Index and Korea’s KOSPI Index ended the week 1.54 and 1.18 per cent higher respectively.

Meanwhile, over in Southeast Asia, Singapore’s STI Index netting a 0.48 per cent decrease while its neighbouring markets such as Malaysia’s KLCI Index, Thailand’s SET Index and Indonesia’s JCI Index ended the week higher by 0.76, 0.44 and 1.03 per cent respectively.

The greatest gains were witnessed in other emerging market equities, as Russia’s RTSI$ Index saw a gain of 4.73 per cent over the week, India’s SENSEX Index ended the week 1.78 per cent higher, and correspondingly, Brazil’s IBOV Index rose by 4.06 per cent over the week. Malaysia’s October exports surprise to the downside

Malaysia’s exports fell 8.6 per cent year-on-year in October, coming in lower than the consensus estimates for a 5.6 per cent and a prior three per cent.

This was the sharpest decline since April 2015. The decline in exports was contributed by a contraction in crude petroleum and liquefied natural gas exports, which fell 27.9 per cent and 40.2 per cent on a year-on-year basis in October.

While exports have been weak in the recent months, there are reasonable prospects for the exports to pick up ahead on the expectation of higher oil prices amid the recent OPEC agreement on production cut. China: November’s Caixin China services PMI rebound to a 16-month high

Looking east, Caixin China Services PMI reading came in 53.1 in the month of November, a 0.7 per cent rise from the previous month and the highest reading in 16 months, suggesting the robust growth of China’s services sector.

The demand for services has increased due to an economic recovery with new projects and orders on the rise.

In line with the expansion of business activities, service enterprises have also increased employment for the third consecutive month which was the fastest pace in 18 months.

Yet, rising prices have increased overall services industry costs to a 21-month high, albeit at a slower rate of increase and lower than the long-term average rate.

With the Caixin China Services PMI reaching a new high, it indicates the recovery of China’s services sector which could see a sturdy growth in the short run.