Equities Weekly: Equity markets mixed after FOMC And Scotland’s referendum

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Equity markets around the world had a mixed performance over the week ended September 19, 2014, with the MSCI AC World index increasing by 1.69 per cent. Developed markets rebounded from the previous week, and were in the black, with US equities (represented by the S&P 500 index) pushing to all-time highs again and recording a gain of 2.48 per cent.

European equities (as represented by the Stoxx 600 index) inched up higher by 1.35 per cent over the week, while the Japanese equity market (represented by the Nikkei 225 index) posted a 1.89 per cent gain.

On the other hand, Emerging markets and Asian markets also followed their developed counterparts, with the MSCI Emerging Markets index increasing by 0.49 per cent and the MSCI Asia ex Japan index posting a 0.11 per cent marginal gain. East Asian equity markets like Hong Kong and Taiwan gained by 0.02 and 0.77 per cent respectively (owing to the appreciation of MYR against these currencies) , while South Korea, as represented by Kospi Index, inched up by 1.38 per cent over the week. However, Chinese equity market (as represented by the HSML 100 Index) was in the red, incurring a loss of 0.66 per cent.

Over in Southeast Asia, the Malaysian equity market (represented by the KLCI index) fell by 0.33 per cent while Thailand’s benchmark SET index posted a 1.55 per cent gain. The Lion City also saw a decline in its equity market, with the STI index declining by 0.31 per cent over the week.

Russia was the bottom performing market under our coverage over the week, with the RTSI$ index incurring a 2.38 per cent loss. Gold prices declined by 1.14 per cent (in US dollar term) over the week, ending the week with a price of US$1,215.70 per ounce as concerns over eventual rate hikes by the Fed weighed on investor’s appetite for the shiny yellow metal.

 

Southeast Asia: Thai central bank keeps rates, Singapore’s non-oil domestic exports rebounded in August

Over in Southeast Asia, the Bank of Thailand (BOT) retained its benchmark interest rate at two per cent for a fourth straight meeting – a move that was in line with consensus expectations.

In its press release, the central bank mentioned that domestic demand is being shored up by improving private confidence and a rebound in private and public spending “which should help sustain economic momentum.”

The BOT also cited that “inflation remained stable,” but supply-side limitations and low agricultural prices have affected exports.

Inflation in the kingdom has remained benign and within the BOT’s target range of one to three per cent, which has allowed policy-makers to keep monetary policy loose to stimulate the Thai economy.

Over in the Lion City, non-oil domestic exports posted a rebound in August, gaining six per cent year-on-year (y-o-y) after a 3.3 per cent decline in the previous month. This was significantly above consensus forecasts of a 2.5 per cent increase.

This marks a break in trend after the measure spent the past three months in negative territory, and was boosted by a 12.1 per cent y-o-y increase in exports of non-electronic products, including the likes of petrochemicals, pharmaceuticals and ships and boats.

Electronic exports continued to weigh on the overall measure, falling 6.9 per cent y-o-y after a 7.9 per cent decline in July, as PC-related exports remained in negative territory.

On the whole, the data highlighted improving demand from South Korea, Taiwan and China, with exports to all three countries gaining on a year-on-year basis, while exports to Thailand, Japan and Hong Kong contracted.

 

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