Global Equities Gain Amid Volatile Trading

Historical patterns reveal that markets often exhibit forward-looking behaviour, forming an upward trajectory before the conclusion of an economic cycle, and with the confirmation of upbeat economic reports, global indices might start the impending recovery phase. 

The past fortnight concluded with a varied performance across major global indices. Notably, the S&P 500 Index came close to matching its longest winning streak in almost two decades, securing its eighth consecutive gain last week. Simultaneously, the Nasdaq Composite Index marked its ninth consecutive gain. Despite this, the market's rise was notably concentrated. 

The US markets marked the culmination of significant third-quarter corporate earnings releases, with specific technology-focused firms exceeding expectations. Analysts highlighted that high-valuation software stocks received a collective boost, attributed in part to the strong performance of cloud monitoring and security firm Datadog. Following better-than-expected earnings and guidance, Datadog surged by 28 per cent last week, providing support to the growth stocks. 

In the pan-European STOXX, the Europe 600 Index concluded 0.21 per cent lower in the past fortnight, with diminishing optimism about a peak in interest rates. Major stock indexes displayed a mixed picture, with France's CAC 40 Index remaining largely unchanged, Germany's DAX gaining 0.30 per cent, and Italy's FTSE MIB experiencing a 0.59 per cent decline. The UK's FTSE 100 Index lost 0.77 per cent. 

European government bond yields witnessed a general increase as markets grappled with the possibility of interest rates staying "higher for longer," spurred by hawkish comments from policymakers. 

The third-quarter UK gross domestic product (GDP) aligned with the Bank of England's projection for zero growth, following a 0.2 per cent expansion in the preceding three months. Monthly GDP surpassed expectations, with a 0.2 per cent growth in September. However, GDP growth for August was revised down from 0.2 per cent to 0.1 per cent. The Office for National Statistics attributed the growth to expansions in engineering, healthcare sales, and machinery leasing, offsetting declines in health, management consultancy, and commercial property rental.



Recent data continued to highlight a sluggish European economy. Eurozone retail sales dropped by 0.3 per cent in September, following a 0.7 per cent decline in August. The economic sentiment index by Sentix consultancy improved to -18.6 in November, up from the previous month's -21.9. In Germany, industrial production in September decreased by 1.4 per cent sequentially after stagnating in August, while manufacturing orders increased by 0.2 per cent, notably below the 1.9 per cent recorded in the previous month. In France and Italy, industrial output remained flat in September compared to August.

In Japan, stock markets saw an uptrend, with the Nikkei 225 Index rising by 1.9 per cent, and the broader TOPIX Index gaining 0.6 per cent. This positive movement was supported by robust corporate earnings, the government's commitment to additional economic stimulus, and ongoing currency tailwinds. The yen weakened against the U.S. dollar, slipping below the 151 level from around 149 the previous week, reaching its lowest point in approximately 33 years. 

Chinese equities experienced growth as investors largely overlooked data indicating a return to contraction in consumer prices, reigniting concerns about deflation in the economy. In the last week, the Shanghai Composite Index rose by 0.27 per cent, while the blue-chip CSI 300 gained 0.07 per cent. However, in Hong Kong, the benchmark Hang Seng Index fell by 2.61 per cent.