Market commentary: Global growth fears weigh sentiment down
Global markets were mixed on Friday as investors contemplated the effects of the Covid-19 Delta variant on the global economy, risks regarding continuous Chinese regulatory crackdowns, and possible tightening of the US monetary policies, says Adrian Pask, CIO at PSG Wealth.
Pask explained, stating that not to mention the coming week’s economic data releases, including local CPI figures and interest rate decisions from an array of central banks, including the US Federal Reserve (Fed), Bank of England, Bank of Japan, and South African Reserve Bank.
“The local market closed down, marking its third consecutive week of declines, with industrials and resources leading losses. The rand came in lower at the close of trade due to a combination of weak local economic data and a stronger US dollar.
“Wall Street was flat at its open as falling heavyweight tech shares, corporate tax uncertainties and the upcoming Fed meeting kept investors away from risk-on trade. In Europe, markets ended the week in the red in light of Anglo American dropping over 8% after being downgraded by Morgan Stanley and UBS and the EU mining sector being pulled down by slow Chinese growth fears”.
Pask said that Asian indices steadied, with the Hang Seng boosted by tech and healthcare and Japan’s Nikkei by major chipmakers, while coal counters dragged down China’s Shanghai.
“Despite posting a weekly gain, Brent crude fell as US energy companies restarted production after back-to-back hurricanes hit the US Gulf of Mexico. The gold price inched up as investors awaited the Fed’s upcoming meeting, but the strong greenback kept gains in check,” he concluded.
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