Mixed signals on stimulus package fail to dampen markets’ upbeat

PERFOR MANCE IN THE DEVELOPED markets were impressive with all indices advancing from the previous week, despite the fact that United States unemployment claims remained sticky around 800,000 people since the beginning of September amid huge furloughs in the airline industry. Another round of stimulus could help, however, mixed signals abound as US House Speaker, Nancy Pelosi and Treasury Secretary, Steven Mnuchin indicated talks on a comprehensive bill, while President Donald Trump requested a hold in discussions till after the November elections.

In the US, the S&P 500 and the NASDAQ indices rose 3.3 per cent and 4.0 per cent week on week respectively. In the UK, the FTSE All-Share index inched higher by 2.3 per cent week on week despite less-than-expected economic growth in August and surging COVID-19 numbers. Similarly, France’s CAC 40 gained 2.3 per cent from the previous week and Germany’s XETRA DAX index advanced 2.6 per cent from the previous week following positive earnings forecasts. Hong Kong’s Hang Seng index rose 2.8 per cent while Japan’s Nikkei 225 index closed the week higher by 2.6 per cent from last week.

Similarly, performance across the BRICS markets mirrored that of the developed markets with all indices advancing further from last week’s performance. India’s BSE Sens gained the most, up 4.7 per cent week on week as the monetary authority maintained an accommodative monetary policy. Similarly, Brazil’s Ibovespa and China’s Shanghai Composite indices inched higher by 3.6 per cent and 1.7 per cent week on week respectively. South Africa’s FTSE/ JSE All-Share and Russia RTS indices also appreciated 1.6 per cent and 1.5 per cent from the previous week respectively.

On the African exchanges, the performance was mixed but positively skewed with 4 out of 6 indices advancing from the previous week. Nigeria’s All-Share and Egypt’s EGX 30 indices led the gainers, up 5.3 per cent and 3.1 per cent from the previous week respectively. Morocco’s Casablanca MASI and Ghana’s GSE Composite indices also gained, advancing 1.1 per cent and 1.0 per cent respectively. Conversely, Kenya’s NSE 20 and Mauritius’ SEMDEX indices lost, down 0.8 per cent and 0.6 per cent respectively.

Across the Asian and Middle East markets, the performance was bullish as oil prices appreciated due to OPEC’s optimism on the oil demand outlook. Thailand’s Set and Turkey’s BIST 100 indices gained the most, up 2.4 per cent and 1.5 per cent respectively. Saudi Arabia’s Tadawul All Share and UAE’s ADX General indices also rose 1.4 per cent and 0.5 per cent from the last week respectively. Lastly, Qatar’s DSM 220 index gained 0.3 per cent from the previous week.