Positive sentiments grew on additional fiscal stimulus, fresh lockdowns

AS THE SEC OND WAVE of the virus is spreading, countries are imposing fresh lockdowns and stricter measures. In the US, House Democrats passed a $2.2 trillion fiscal stimulus package to support the economy. However, this is unlikely to receive support in the Senate, prompting further negotiations with the Treasury Secretary, Steve Mnuchin. Similarly, there are positive sentiments around a possible resolution to internal disputes preventing the European Union (EU) from passing a €1.8 trillion coronavirus recovery package.

The developed markets recorded a positive performance as 6 of the 7 indices recorded gains in the last week. In the US, the S&P 500 and NASDAQ indices rose 1.8 per cent and 2.6 per cent from last week respectively, reversing the previous week’s losses following approval of the stimulus package in the House. In the UK, despite surging COVID-19 numbers and stricter lockdown meaThe sures, the FTSE All-Share index inched higher by 0.7 per cent week on week following optimism on a postBrexit trade deal with the EU. Similarly, France’s CAC 40 and Germany’s XETRA DAX indices gained 1.5 per cent and 1.3 per cent from the last week respectively, following another attempt by the EU to pass the €1.8 billion recovery package. Hong Kong’s Hang Seng index rose 1.0 per cent, while Japan’s Nikkei 225 index closed the week lower by 0.8 per cent week on week.

In the BRICS region, there was a mixed performance albeit negatively skewed as 3 of the 5 indices lost week on week. Russia’s RTS index slipped 1.5 per cent as crude oil prices remain upward sticky. Trailing, Brazil’s Ibovespa and China’s Shanghai Composite indices fell 1.4 per cent and 4 basis point week on week respectively. On the other hand, India’s BSE Sens and South Africa’s FTSE/JSE All-Share indices rose 3.5 per cent and 1.2 per cent week on week respectively.

In the African region, the performance was bullish as 5 of the 6 indices gained from the previous week, save Mauritius’ SEMDEX index which lost 2.7 per cent. Nigeria’s AllShare index led gainers, up 2.5 per cent following increased buying interest in the stock market ahead of earnings season. Similarly, Egypt’s EGX 30 and Morocco’s Casablanca MASI indices reversed last week’s losses, rising 1.3 per cent apiece. Likewise, Ghana’s GSE Composite and Kenya’s NSE 20 indices rose 0.6 per cent and 0.2 per cent respectively.

Performance across the Asian and Middle East markets was impressive as 4 of 5 indices closed positive. Thailand’s SET index was the lone loser, down 0.6 per cent from the previous week. Conversely, Qatar’s DSM 220 and Turkey’s BIST 100 indices rose 2.2 per cent and 2.0 per cent respectively. Saudi Arabia’s Tadawul All Share Index and UAE’s ADX General Index gained 0.7 per cent and 0.6 per cent week on week respectively.