Global equities market sustain bullish performance despite economic weakness

COVID-19 cases rose 13.4 per cent last week (against 10.7% rise recorded in the previous week) to 21.1 million while the death toll increased 7.9 per cent ( against 6.1% the previous week) to 758,325 persons. The US has the highest number of active cases with 2.4 million (or 37.5% of total active cases) while Brazil and India followed with 767,417 and 664,518 cases respectively. While the gradual easing of the lockdown is supporting economic recovery, another wave of COVID-19 cases in some states is hurting the US economy.

Beyond the $2.2 trillion Cares Act passed in March 2020, another round of stimulus to shore up the economy amid COVID-19 is being negotiated. So far, debates by lawmakers on the size and nature of the stimulus been contentious, raising concerns about a fastpaced economic recovery.

In the developed markets, all indicators under coverage recorded gains save US’ NASDAQ which closed flat. However, the S&P 500 index rose 0.6 per cent week on week. In Europe, France’s CAC 40 and Germany’s XETRA DAX indices gained 1.5 per cent and 1.6 per cent week on week respectively. Also, the UK’s FTSE All-Share index advanced 0.9 per cent on weekly comparison despite a reported 20.4 per cent annualised contraction in the country’s GDP in Q2:2020. Meanwhile, Japan’s NIKKEI 225 and Hong Kong’s Hang Seng indices were the best performing indicators, with 4.3 per cent and 2.7 per cent week on week gains respectively.

In the BRICS region, 3 of the 5 indices that covered recorded gains. Brazil’s IBOVESPA index led decliners as it dropped 1.2 per cent from the previous week as COVID-19 related deaths showed no signs of easing. In the same vein, India’s BSE Sens index shed 0.4 per cent from the past week. On the other hand, Russia’s RTS index recorded 4.0 per cent week on week, an increase to lead the gainers as investors reacted positively to the county’s approval of the first coronavirus vaccine. Similarly, China’s Shanghai Composite and South Africa’s FTSE/JSE All Share indices rose 0.2 per cent and 0.5 per cent from the past week respectively.

In the meantime, African markets covered recorded a mixed performance as 3 of the 6 indices advanced. Egypt’s EGX 30 index was the best performer with 1.2 per cent gain as the country’s Central Bank maintained key policy rates. Also, Nigeria’s All-Share index maintained a bullish streak this week as it advanced 0.6 per cent week on week while Morocco’s Casablanca MASI index recorded 0.5 per cent week on week gains. On the flip side, Mauritius’ SEMDEX index led the laggards, shedding 2.1 per cent week on week. Furthermore, Kenya’s NSE 20 and Ghana’s GSE Composite dropped 0.8 per cent and 0.5 per cent week on week respectively.

Meanwhile, the performance was bullish across the Asian and Middle East markets covered as all indices trended northward from the past week, save Thailand’s SET index which fell 0.5 per cent week on week. Saudi Arabia’s Tadawul ASI and Turkey’s BIST 100 indices led with gains of 2.7 per cent and 2.1 per cent from the previous week respectively. Similarly, Qatar’s DSM 220 index advanced 2.0 per cent week on week while UAE’s ADX General Index rose 0.6 per cent week on week as the country reached a historic peace agreement with Israel.