Global stock markets have made a strong recovery from the banking sector jitters that caused steep share-price falls at the end of last week.
Friday’s sell-off was sparked by concerns that the failure of Credit Suisse earlier in the month could have serious ramifications for major eurozone banks, with German institutions in particular thought to be facing renewed pressure. However, those fears appeared to have eased over the weekend and given the lack of further bad news, financial stocks across Europe have managed to bounce back.
Share prices around the world have also been helped by the news that a major Chinese technology corporation, with a dual listing in Hong Kong and New York, is planning to split its operations into six new business units. Investors welcomed the move as it is likely to create more value for shareholders. It also shows that the Beijing government may be relaxing its tough regulatory stance on the country’s technology sector.
United States
On Wall Street, the Dow Jones Industrial Average ended trading on Thursday 1.9% up for the week so far, with the S&P 500 advancing 2.0%. The gains were underpinned by strong technology stock performance, with the tech-heavy Nasdaq index entering bull market territory after a turbulent 2022. Meanwhile, investors remain unsure about the course of action the Federal Reserve is likely to take at its next meeting in early May. New data revealed that consumer confidence has remained resilient in the US, although this week’s rise in jobless claims could give the Fed a reason to pause its recent run of interest rate hikes.
UK
In the UK, the FTSE 100 closed on Thursday 2.9% up for the week so far, with shares in London buoyed by receding fears of a full-blown financial crisis as well as a rise in commodity prices. Bank of England Governor, Andrew Bailey, helped to calm nerves by stressing that the UK’s financial system remains robust, but warned that some of the regulatory framework introduced in the wake of the global financial crisis in 2008 was in danger of becoming outdated. New data indicated that confidence among UK firms is growing following a difficult winter, although high interest rates saw mortgage lending in Britain fall to its lowest level since 2016 in February.
Europe
In Frankfurt, the DAX index ended Thursday’s session up 3.8% for the week, while France’s CAC 40 gained 3.5% as European markets returned to levels not seen since the recent banking crisis began at the start of March. Investors welcomed the news that inflation in Spain had fallen sharply after rising at the start of the year. Similarly, the rate of price increases in Germany has slowed, but not as quickly as analysts expected.
Asia
In Asia, the Hang Seng index in Hong Kong rose 2.0% as investors reacted positively to reports that one of the index’s leading technology firms is to be restructured. Gains in China were limited to some extent by the news that Taiwan’s leader is to meet senior American politicians during a visit to the US- a development that has been condemned by Beijing. Japan’s Nikkei 225 index of leading shares advanced 1.5%, with rises in banking and technology stocks in Tokyo matching gains elsewhere in the world.
24 March | 30 March | Change (%) | |
|---|---|---|---|
FTSE 100 | 7405.5 | 7620.4 | 2.9 |
FTSE 250 | 18493.8 | 18907.7 | 2.2 |
S&P 500 | 3971.0 | 4050.8 | 2.0 |
Dow Jones | 32237.5 | 32859.0 | 1.9 |
DAX | 14957.2 | 15522.4 | 3.8 |
CAC 40 | 7015.1 | 7263.4 | 3.5 |
ACWI | 625.1 | 639.9 | 2.4 |
Hong Kong Hang Seng | 19915.7 | 20309.13 | 2.0 |
Nikkei 225 | 27385.3 | 27782.9 | 1.5 |
Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 30 March 2023.
