Chinese Indices Hit The Limelight

While the other global indices staggered forward at a slow pace, technology firms and the banking index pushed China to the top

Globally, indices such as DJIA and Nasdaq ended the fortnight in green, up by 0.12 per cent and 1.31 per cent, respectively. Meanwhile, the S & P 500 index touched its lifetime high of 4,286.12 on June 25, 2021 catapulted by rise in banking stocks and weak inflation data. Investor sentiments remained positive as Federal Reserve Chairman Jerome Powell gestured no major plans in store for sudden changes to the existing accommodative monetary policy and the US bipartisan infrastructure deal. S & P 500 index rose by 0.60 per cent during the fortnight. The FTSE 100 was in red, down by 0.15 per cent for the fortnight as losses in heavyweight energy, financial, banking and consumer stocks pulled the index lower.

Hong Kong’s benchmark index Hang Seng was up by 1.55 per cent as shares of Chinese technology firms like Alibaba and Tencent were in focus throughout the previous week. The Shanghai Composite index gained a mere 0.50 per cent. Chinese banking stocks were in the limelight as new reforms to calculate deposits are expected to help make funding costs cheaper for banks. On the other hand, Japan’s Nikkei index declined 0.33 per cent during the fortnight. Singapore’s Straits Times index also experienced increased volatility as blue chips and banking stocks were under selling pressure. The benchmark index concluded the fortnight on a negative note, losing 1 per cent despite relaxing of pandemic restrictions across the entire country. South Korea’s KOSPI gained around 1.56 per cent during the fortnight.

Optimism stems from high hopes of rapid economic recovery as well as the continuing global market rally. KOSPI’s market capitalisation has exceeded USD 2 billion irrespective of hawkish comments from Lee Ju-Yeol, Governor of Bank of Korea, that they will likely raise interest rates to combat the soaring inflation which poses a threat to their targeted 4 per cent economic growth. Other prominent indices in the global markets such as S & P | TSX Composite index, which is the benchmark Canadian index, rose by 0.36 per cent during the fortnight whereas Brazil’s BOVESPA index plunged by 2.27 per cent. The S & P | ASX 200, which is considered the benchmark for Australian equity performance, ended the fortnight on a flattish note by losing 0.06 per cent..

"Optimism stems from high hopes of rapid economic recovery as well as the continuing global market rally"