Global equity markets ended on a weaker note last week, with the MSCI AC World Index falling 1.61 per cent over the week ended July 24, 2015. The US equity market, as represented by the S&P 500 Index, declined 1.7 per cent as markets digested a mixed bag of quarterly earnings results. European equities also finished the week lower, with the Stoxx 600 Index down by 1.12 per cent. Japan was the only developed market under our coverage to post a positive return of 0.25 per cent last week.
Asian and emerging equity markets as a whole also lost ground over the week. The MSCI Asia ex Japan Index receded 1.46 per cent mainly due to losses seen in Taiwan and South Korea equity markets, which fell 3.76 per cent and 2.67 per cent respectively. While the HSML 100 Index was down slightly by 0.38 per cent, the local Chinese equity market rallied, with the Shanghai Composite Index and the Shanghai Shenzhen CSI 300 Index gaining 3.41 and 1.12 per cent respectively. Over in Southeast Asia, Thailand’s equity market fell 4.24 per cent, while its other peers delivered muted performance, with the Singaporean, Malaysian and Indonesian equity markets seeing mild movement of 0.05, 0.35 and 0.92 per cent respectively.
Emerging equity markets, as represented by the MSCI Emerging Markets Index, was down by 2.82 per cent over the week, weighed down by losses seen in the Brazilian and Russian equity markets. Brazil, as represented by the Bovespa Index, plunged 9.77 per cent on political concerns while Russia, as represented by the RTSI$ Index, slid 5.35 per cent as oil prices fell over the week. India’s equity market also fell over the week, declining by 1.69 per cent.
Gold saw heavy selling pressure over the week, with prices falling down by 2.61 per cent. Oil prices also fell by 4.91 per cent to its lowest level in almost four months on renewed oversupply concerns after data showed US drilling activity increased last week.
Singapore: Headline inflation falls for eighth consecutive month
Consumer prices in Singapore fell for the eighth consecutive month by 0.3 per cent year-on-year in July 2015, in line with market expectations and edging up from the previous month’s 0.4 per cent due to larger increases in the cost of services, food and private road transport. The MAS core inflation, which excludes the costs of accommodation and private road transport, was at 0.2 per cent, accelerating slightly from the 0.1 per cent increase seen in the prior month.
Services inflation increased slightly by 0.5 per cent from June 2015 while sharper price increases for hawker meals and restaurant food pushed food inflation up to two per cent from 1.8 per cent in the previous month.
Price inflation of private road transport came in at 1.2 per cent on account of a decline in petrol pump prices. Moving forward, the MAS and MTI has projected that the headline and core inflation for 2015 as a whole are likely to come in at the lower half of the target range of 0.5 per cent to 0.5 per cent and 0.5 per cent to 1.5 per cent respectively.
East Asia: China’s July flash PMI falls to 15-month low, MERS outbreak hits South Korea’s 2Q15 GDP
Over in East Asia, the preliminary Caixin Purchasing Managers Index (PMI) fell to a 15-month low of 48.2 in July 2015, coming in well below the consensus forecast of 49.7 and marking the fifth consecutive month of contraction for the Chinese manufacturing industry.
The flash reading was in stark contrast to China’s 2Q 2015 gross domestic product (GDP), which beat forecasts to show seven per cent growth year-on-year, fuelling concerns that a pickup in economic momentum in 2Q 2015 may not have extended to third quarter (3Q) 2015.
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