Global Markets Face A See-Saw Scenario

While the European markets posted gains and the US markets shrunk by a margin, the Asian markets witnessed both highs and lows during the fortnight 

The global markets remained mixed during the fortnight. In the US, the Dow Jones Industrial Average shrunk by 0.75 per cent while S & P 500 gained 1.21 per cent and NASDAQ Composite added 3.09 per cent while closing for the fortnight. In the US and European markets, investors traded cautiously as they opted to wait prior to making any new bets for the results of the much-anticipated Federal Reserve policy meeting that ended on June 16 regarding the central bank’s view on making any changes to the US’ monetary policy outlook. In the European markets revised euro zone growth data indicated that the region’s economy contracted less than expected in the first quarter of the year.

Despite worries about lack of support being offered to companies facing heavy losses from the one-month delay to the end of the pandemic-triggered lockdown measures, the FTSE 100 index gained 1.59 per cent during the fortnight. For the same period of time, DAX, which represents German stocks, and CAC 40, a proxy for French stocks, posted gains of 1.64 per cent and 2.62 per cent, respectively. The French stocks edged higher as the European Central Bank expanded its growth and inflation projections while keeping a steady flow of stimulus for now. Amongst the Asian indices, Hang Seng index dipped by 1.06 per cent.

On the flip side, Nikkei registered an increase of 1.05 per cent during the fortnight. The poor performance of the securities of digital and technology companies dragged the Hong Kong’s benchmark index, Hang Seng. Japan equities were higher as gains in the paper and pulp, railway and bus, and real estate sectors pushed the shares to the upper level. Compared to its Asian peers, S & P | ASX 200 outperformed, gaining by 2.10 per cent during the fortnight. Australian shares traded on the higher side due to gains in banking and healthcare stocks coupled with the domestic central bank’s June meeting indicating extension of its accommodative stance.

Shanghai Composite index squeezed by 0.71 per cent during the fortnight. As for the performance of the other important indices during the recent fortnight, the Straits Times index, representing Singapore stocks, declined 0.35 per cent. Meanwhile, the Brazilian stock index, BOVESPA, jumped 3.16 per cent and this was the highlight of the fortnight amongst global indices. Canadian index S & P | TSX Composite registered gains of 2.16 per cent whereas OMX Copenhagen 20 rose by 2.29 per cent. The SZSE Component index tumbled by 1.25 per cent whereas KOSPI, the Korean benchmark index, gained by 1.5 per cent.