Strong Momentum Lift Global Equities Higher

During the past fortnight, major indices of the U.S. equity markets showed positive momentum, closing a quarter marked by strong gains. [EasyDNNnews:PaidContentStart]

The S&P 500 Index achieved new highs in both closing and intraday levels last week. This upward trend was widespread, with the equal-weighted version of the S&P 500 Index posting a gain of 1.64 per cent, surpassing the 0.39 per cent rise in the market-weighted version. Additionally, Small-Cap stocks outperformed large caps, as evidenced by the 1.79 per cent surge in the Russell 1000 Value Index compared to a 0.60 per cent decline in its growth counterpart. Trading was limited in the last week of March as many international markets were closed on account of Good Friday. 

In the U.S. Treasuries market, positive returns were observed for the week, with new issuances being readily absorbed. Moving to the corporate bond market, issuance slightly exceeded expectations, and early-week deals were oversubscribed. The highyield primary space also saw activity as some issuers aimed to introduce new deals before the holiday weekend. 

In Europe, most markets experienced gains amid light trading due to the Easter holiday weekend. The STOXX Europe 600 Index reached a record high, rising by 0.59 per cent in local currency terms. Despite confirmation of economic slowdowns in certain major economies, European government bond yields decreased. The European Central Bank (ECB) hinted at a possible rate cut in June depending on wage growth trends, while concerns over eurozone bank lending and economic outlook were also raised. 

In the UK, economic data confirmed a technical recession, with the economy contracting in the final quarter of 2023. Germany reported a significant drop in retail sales and revised its economic growth forecast downward due to factors like high-interest rates, weak global demand, and political uncertainties. Japan's stock markets faced declines, with a focus on the yen's depreciation against the U.S. dollar, prompting discussions about possible interventions to support the Japanese currency. The yield on Japanese government bonds fell following the Bank of Japan's policy shift, which included raising interest rates from negative levels for the first time in years. 

Chinese stocks saw declines amid ongoing concerns about the property sector downturn. This is despite some positive economic indicators indicating traction in China's economy. Deflationary pressures and challenges in the property market continued to impact investor sentiment. 

During the China Development Forum, an annual gathering of global business leaders, Chinese Premier Li Qiang emphasised the country's openness to foreign investment. He also committed to enhancing support for growth across various sectors, including biological manufacturing, artificial intelligence, and the data economy. However, while Beijing conveyed a pro-business stance, investors are keen on seeing concrete evidence of China's commitment to implementing policies that align with its growth objectives. At the same event, International Monetary Fund Managing Director Kristalina Georgieva remarked that China could achieve a 20 per cent expansion over the next 15 years through pro-market reforms. 

In economic updates, industrial firms in China experienced a notable 10.2 per cent surge in profits during the January to February period compared to the previous year, rebounding from a 2.3 per cent decline in 2023. This growth was attributed to supportive policies and increased global demand. The year-overyear increase was also influenced by a low comparison base from the previous year, which saw China emerging from pandemicrelated lockdowns. These recent indicators contribute to the narrative of China's economy gaining momentum, with positive trends observed in industrial production, fixed-asset investment, and retail sales over the two months.

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