Global Stock Market-Weekly Updates ( 22-26 May 2023)
The global stock market indexes closed mixed during the week that ended on 26 May 2023. On a weekly basis, US Dow closed lower despite the debt ceiling optimism rally on Friday, while S&P 500 and Nasdaq ended positive. European stock markets ended the week in the red. Asia stock markets were also closed mixed, the benchmarks India and Japan were advanced while Shanghai and Hang Seng closed in the red during the week.
The US Stock Markets – Weekly Updates
The US stock market indexes ended mixed as investors were closely watching the signs of progress of debt ceiling negotiation talks. The tech-heavy Nasdaq outperformed due to a rally in tech stocks and ended the week over a 2 % gain. The share price of chipmaker Nvidia jumped 25% after the company announced solid first-quarter earnings which beat consensus expectations by a wide margin and raised its profit outlook.
The second round of debt ceiling talks began after President Joe Biden returned from Japan at the start of the week, but so far there is no resolution. However, the signs of renewed momentum in the talks seemed to spur a market rally on Friday. The U.S. Treasury Secretary Janet Yellen estimates that debt-limit measures will run out by June 5, which means only a week left for the deal.
Markets rallied on Friday, but the upside was limited due to higher inflation data. The core personal consumption expenditures (PCE) price index, which is also Fed’s preferred inflation gauge, rose by 0.4% in April, slightly above expectations.
The latest data showed that personal spending had jumped 0.8% in April, almost double the consensus expectations due to an increase in spending on both goods and services. This led to a jump in US short-term Treasury yields, the two-year note yield hit its highest level in over two months
European Stock Market Indexes- Weekly Updates
European stock market indexes fell during the week due to concerns about the economic outlook in the region and continued uncertainty over US debt ceiling negotiations. All the key stock market indexes, DAX, CAC, and FTSE fell 1-2% during the week.
The German economy is in recession, as the country’s GDP shrank 0.3% in the three months (Jan-March) after a downward revision from an early estimate of zero growth. In the previous three months (Oct-Dec 2022) Germany’s economy contracted by 0.5%. The latest survey data also showed that the country’s business confidence index fell in May for the first time in seven months.
The latest survey data showed that Eurozone business activity grew for the fifth straight month in May, but optimism weakens due to customer demand and surges in interest rates. The sentiments were hit after ECB President Christine Lagarde’s hinted that interest rates would need to rise further to curb inflation in the medium term.
However, the downside was limited as UK’s retail inflation slowed in April but core inflation remains at a record high. The International Monetary Fund (IMF) revised its forecast for the UK economy, saying demand and falling energy costs would help it to grow 0.4%, earlier IMF projection was a 0.3% contraction.
Asian Stock Markets Updates
Indian Stock Market Weekly Updates
Indian equity markets ended the week with modest gains. The domestic markets gained four out of five trading sessions during the week. Sensex and Nifty advanced 1.25 percent and 1.63 percent respectively. All sectoral indices closed higher on NSE with metals, pharma, and media gaining the most for the week.
Institutional buying and healthy corporate earnings support the domestic markets while the upside was limited due to the concern about the slow progress of the US debt ceiling talks. FIIs, and DIIs both were buyers in the Indian equity markets last week. FIIs bought shares worth Rs 3230.49 crore DII purchased Rs 3482.21 crore shares for the week.
Japanese Stock Market Weekly Update
Japan’s Nikkei touched a 33-year high at the beginning of the week. The sentiments were upbeat due to strong economic data and optimism about the US debt ceiling talks.
The manufacturing activity expanded for the first time in seven months in May while the services sector also reported robust growth due to the return of domestic and international tourism
Chinese Stock Market Weekly Update
China’s Shanghai index fell around 2% after a series of disappointing indicators in recent weeks pointed to a slowing economic recovery. The People’s Bank of China (PBOC) left its one-and five-year loan prime rate unchanged earlier in May for the nine consecutive months
There were no major economic data released during the week in China. However, geopolitical risks somewhat dampened the risk appetite of investors after China said it would ban buying products from US Micron Technology, though the local chipmaker gained after the news.
Hong Kong benchmark, the Hang Seng index fell below the psychologically key 19,000 level, to its lowest close since December during the truncated week.
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