Global Stocks Rebounded Despite Worries about Covid-19

Highlights:

• • USA
    The Dow Jones advanced by 0.65% or 225.96 to 35,120.08. The S&P 500 added 0.81% or 35.87 to 4,441.67. Meanwhile, the Nasdaq gained 1.19% or 172.88 to 14,714.66. 
  • ASIA
    The Nikkei added 1.78% or 480.99 to 27,494.24.
    The Kospi increased by 0.97% or 2.70 points to 3090.21.
    The Hang Seng Index rose by 1.05% or 259.87 points to 25,109.59.
  • EUROPE
    The EuroStoxx 50 index increased by 0.38%, and the Stoxx 600 added 0.29%.

Wall Street closed its worst week since June

Wall Street ended its worst week since June due to concerns about the delta variant and the possible withdrawal of stimuli by the US Fed.

The Dow Jones has accumulated a loss of 1.1% in the last five sessions. The selective S&P 500 slipped by 0.6% and the Nasdaq Composite Index lost 0.7%.

This week the market will be focused on Covid-19 

Last week has been irregular. However, Friday’s rebound, driven by technology companies, has enabled the market to regain some ground.

Analysts believe that the good round of quarterly results generated records. Still, they will be left behind, and the pandemic situation will return to the focus.

 

The rebound in covid-19 infections remains the most important factor of the week globally due to the fear that the delta variant will keep hindering the economic recovery. 

Goldman Sachs drastically reduced its growth forecasts in the United States for the third quarter from 9% to 5.5%. It generated pessimism.

The energy sector has been especially affected. Meanwhile, the technology sector has again held all-time highs thanks to firms such as Apple, the world’s largest company.

Macroeconomic data from the US and China pointing to a slowdown, and geopolitical tensions in Afghanistan have also played a role.

August is typically a quieter trading month because of the Wall Street summer break. However, it also gives rise to volatile movements.

On Thursday, the market reacted to the minutes of the last Fed meeting published the day before. Rising inflation remains in the foreground as unemployment moves downward. Claims for unemployment benefits have been at their lowest level since the pandemic broke out.

However, experts have mentioned that the Fed could change its point of view on monetary policy if the delta variant had a substantial impact on US economic growth.

Traders will be on the lookout for the central bankers meeting in Jackson Hole this week, waiting for more guidance.

After almost two weeks of profits and several record highs, delta, inflation, and geopolitical concerns have eventually put investors on hold. 

 

The Nikkei rebounded after three days of losses

The Nikkei average rebounded sharply for the first time in 3 days. In fact, the Nikkei average slipped by about 960 yen last week, but Wall Street’s rebound helped it. Also, the recent rebound in Hong Kong and Shanghai stocks also supported the Japanese stock market.

The Nikkei added 1.78% or 480.99 to 27,494.24. The trading volume of the first section of the Tokyo Stock Exchange was 944.16 million shares, and the trading value was 2,310.3 billion yen. 

The Topix climbed by 1.83% or 34.46 points, to stand at 1,915.14. 

By industry, the shipping industry, transportation equipment, and electrical equipment have the highest rate of increase. Only the mining industry fell slightly. The number of rising stocks was 89%, while the number of falling stocks was 9%. 

The Japanese square increased gains particularly in the second section of the session. It rose almost 2% after the defeat of the candidate backed by the ruling party in local elections. It fueled expectations that the Government would adopt additional economic stimuli.

The shipping industry received the most significant losses of the day, along with transportation equipment and electronics sectors.

Automotive component maker Denso increased the most among Nikkei-listed companies adding 6.6%. It was followed by transportation companies K Line increasing by 6.31% and Mitsui OSKgaining 5.41%.

Transport company Nippon Yusen accumulated the highest volume of operations and advanced by 4.52%.

The vehicle manufacturer Toyota climbed by 3.44%, and the Softbank group lost 1.07%.

 

Seoul extends thanks to good South Korean export data

The Kospi index rebounded by 1% after three days of losses. It increased by 0.97% or 2.70 points to 3090.21. 

The index’s rise was driven by institutions that net bought 609.8 billion won. Among institutions, the financial investment made the largest net purchase at 456.6 billion won. The pension fund also net bought 31.1 billion won. On the other hand, individuals and foreigners net sold 572.3 billion won and 31.1 billion won, respectively. Besides, South Korean exports recorded good data.

The successful rebound of the US stock market seems to have had a positive effect on the South Korean market as well. 

Semiconductor giant Samsung Electronics rose by 0.83%, and SK Hynix gained 0.49%. NAVER added 1.66%, and Samsung Biologics increased by 2.33%. 

Hyundai Motor, the largest South Korean carmaker, closed 1.24% higher. Meanwhile, its subsidiary Kia Motors advanced by 0.46%.

Samsung Biologics expanded by 2.33%, and its competitor Celltrion climbed by a significant 6.77%.

 

The Hang Seng starts the week with a rise 

The Hang Seng Index surged by more than 2% in the morning, and the gains in the afternoon stopped. Moreover, the Hang Seng Index rose by 1.05% or 259.87 points to 25,109.59. The Hang Seng China Enterprises Index added 0.84% or 73.12 points to 8,815.56. All Hang Seng Index stocks rose, and utilities led the rise by 1.39%.

Raw materials performed best, Dongyue Group added 16.74%, Minmetals Resources increased by 6.19%, and Sinofert added 10.34%. CITIC Resources grew by 3.75%, Shanghai Petrochemical advanced by 2.53%, and Zijin Mining gained 4.18%.

Among technology stocks, Tencent rebounded, but Alibaba was affected by the investigation of Hangzhou Municipal Party Committee Secretary Zhou Jiangyong. The company shares fell by 3.67%.

Most notable was the session of the pharmaceutical services company Wuxi Biologics which surged by 7.31%.

Chinese state companies closed in the mixed territory. The oil company Petrochina advanced by 3.02%. Cnooc, its partner in the sector fell by 1.39%. Among the telephone operators, China Mobile added 0.89%, and China Unicom slipped by 0.23%.

 

European stocks bounced back

The main European stock markets traded with an increase at the start of the session on Monday.

The EuroStoxx 50 index increased by 0.38%, and the Stoxx 600 added n0.29%.

Last week was moved by the spread of the Delta variant of the Covid-19 and worries about US tapering. 

In Europe, the first results of the IHS Markit PMI surveys show a slowdown in activity growth in recent weeks. However, the continued recovery has not been questioned.

In London, the British supermarket group Sainsbury gained 9.13%.