Sentiment poor as US delays fiscal stimulus, dragging market performance globally
IN THE GLOBAL FI NANCIAL MAR KET, sentiment remained mixed following an upsurge in COVID-19 cases, the slow progress in vaccine development and weak optimism about additional fiscal stimulus in the US. The size and timing of additional fiscal stimulus in the US remain uncertain as the contentious debate on stimulus proposals continued. Meanwhile, economic recovery in the US remains slow-paced, with unemployment claims rising 53,000 to 898,000 people last week, the largest weekly increase since July.
In the developed markets, the performance was mixed. The US S&P 500 and NASDAQ indices gained 0.9 per cent and 1.7 per cent week on week respectively buoyed by better-than-expected earnings releases. Similarly, Hong Kong’s Hang Seng index rose 1.1 per cent. Conversely, France’s CAC 40 and Germany’s XETRA DAX indices fell 3 basis points and 0.9 per cent week on week respectively as the surge in COVID-19 cases prompted lockdown measures. Also, the UK’s FTSE All-Share declined 1.5 per cent following slow momentum on UKEU trade deal while Japan’s Nikkei 225 index fell 0.9 per cent.
Across the BRICS markets, 2 of 5 indices posted gains. China’s Shanghai Composite index led gainers, up 2 per cent week on week despite President Xi’s speech which provided no clue on further opening on the economy. Likewise, Brazil’s Ibovespa index rose 1.2 per cent week on week as investors reacted to the central bank’s report that economic activity increased 1.1 per cent month on month in August. Meanwhile, Russia’s RTS and India’s BSE Sens indices lost 2.5 per cent and 1.3 per cent week on week respectively. Lastly, South Africa’s FTSE/JSE All Share index declined 0.2 per cent from the previous week’s performance.
The performance was poor across the African markets as Morocco’s Casablanca MASI and Nigeria’s NSEASI indices were the gainers, up 1.2 per cent and 0.9 per cent week on week respectively. Conversely, Kenya’s NSE 20 index led the laggards following a 1.2 per cent loss week on week. Also, Ghana’s GSE Composite and Egypt’s EGX 30 indices fell 1.0 per cent and 4 basis point week on week respectively. Finally, Mauritius’ SEMDEX index declined 2 basis points from last week.
Performances across the Asian and Middle East markets were positive, although Thailand’s SET and Qatar’s DSM 220 indices lost 3.2 per cent and 0.3 per cent week on week respectively. On the flip side, Turkey’s BIST 100 and Saudi Arabia’s Tadawul ASI indices gained 2.3 per cent and 1.7 per cent week on week respectively. Also, the UAE’s ADX General index closed the week higher at 0.9 per cent.