Equities weekly: Global equities plagued by US uncertainties

Global equities, as represented by the MSCI AC World Index, rose 0.04 per cent. The US president, Donald Trump, imposed a ban on immigrants from seven Muslim-populated countries, a move that could potentially hurt businesses in the US, while the Fed held rates amid uncertainties, including the country’s future fiscal policies under the new president’s administration.

In addition, the first US jobs report of the year revealed mixed labour market performance given robust job creation data but smaller-than-expected wage growth. Equity investors’ appetites were dampened amid increased uncertainty over in the world’s largest economy.

Amongst developed markets, the Europe’s Stoxx 600 Index and US’s S&P 500 Index rose 0.21 and 0.02 per cent respectively while Japan’s Nikkei 225 Index fell 0.62 per cent over the week.

Over in Asia and emerging markets, the MSCI Asia ex Japan Index saw weekly declines of 0.03 per cent while the MSCI Emerging Markets Index increased 0.22 per cent. Hong Kong’s HSI Index ended the week as the poorest performer of markets under our coverage with a 1.09 per cent decline.

Meanwhile, China’s offshore equity market, as represented by the HSML 100 Index, fell 0.82 per cent over the week and its onshore equity markets, as represented by the Shanghai Composite Index increased 0.05 per cent while the Shenzhen CSI 300 Index, fell 0.04 per cent.

Other East Asian equity markets such as Taiwan’s TWSE Index and Korea’s KOSPI Index, on the other hand, managed to stay buoyant, as they were some of the few markets that gained over the week, with a 1.53 and 2.36 per cent gain respectively.

Indonesia’s JCI Index ended the week as the strongest weekly performer amongst Southeast Asian equity markets, with a surge of 1.38 per cent. Meanwhile, Singapore’s STI and Thailand’s SET Index gained 0.74 and 0.18 per cent respectively while Malaysia’s KLCI Index fell 0.08 per cent when the week ended.

Amongst other emerging markets, Indian equities, as represented by the SENSEX Index, outshone with a 2.69 per cent weekly gain, while Russia’s RTSI$ Index and Brazil’s Bovespa Index fell 0.54 and 0.44 per cent respectively over the week. Singapore: December’s manufacturing output surges 21.3 per cent

In Singapore, the industrial production surged 21.3 per cent year-on-year in December 2016, up from previous month’s 11.9 per cent and outperforming consensus estimates of a 10.4 per cent increase.

While the volatile biomedical manufacturing cluster had continued to contribute to the surprising increase in output with a 44.9 per cent year-on-year increase in output, output streaming from the electronics cluster grew a greater 49.4 per cent year-on-year. Meanwhile, that of the precision engineering, chemicals, and general manufacturing clusters had grown 6.1, 4.1, and two per cent respectively.

The transport engineering cluster, on the other hand, continued to be a laggard with a 10.5 per cent year-on-year decline in output, given the still weak Oil & Gas sector. At this juncture, the Singapore economy still looks to see modest growth in the near term and recent expectations are for the economy to grow 1.5 per cent and 2.0 per cent in 2017 and 2018 respectively. Japan: Industrial production recovery remains on track

On a year-on-year basis, industrial production rose three per cent in December 2016, in line with market expectations and rose 0.5 per cent on a month-on-month basis, slightly higher than market expectations of 0.3 per cent increase.

Manufacturing output had been supported by the depreciation of the yen and an increased production in the automotive sector and Japan’s Ministry of Economy, Trade and Industry (METI) continues to maintain their view that “industrial production has shown signs of recovery.”

Also, a survey of local manufacturers had revealed good sentiment, with the respondents expecting industrial output in January 2017 to see a three per cent increase month-on-month.