Equities weekly: Global equities dip amidst increased geopolitical tensions

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The US, North Korea and Syria were at the centre of the geopolitical tensions that continued to dampen investor risk appetite, with the MSCI AC World Index down by 1.27 per cent when the week ended.

North Korea signalled a possible nuclear strike should it feel threatened by the US, while the US launched a cruise-missile strike on Syria following a chemical-weapons attack that was allegedly conducted by the Syrian regime.

Amongst developed markets, US equities saw the greatest weekly decline, with the S&P 500 Index ending the week 1.64 per cent lower. Meanwhile, Europe’s Stoxx 600 Index and Japan’s Nikkei 225 Index fell 0.48 and 0.11 per cent over the week.

Amongst Asian and emerging markets, losses were witnessed over the week as well, as both the MSCI Emerging Markets Index and the MSCI Asia ex-Japan Index fell 0.75 per cent over the week.

In East Asia, China’s onshore equities, as represented by the Shanghai Composite Index and the Shanghai Shenzhen CSI 300 Index, fell 1.53 and 1.2 per cent respectively, while its offshore equities, as represented by the HSML 100 Index, fell 0.87 per cent over the week. Korea’s KOSPI Index and Taiwan’s TWSE Index did not perform any better, as they fell 1.58 and 1.26 per cent respectively. Hong Kong equities, as represented by the HSI Index, performed slightly better over the week, as they fell a lesser 0.61 per cent.

In Southeast Asia, equities were generally met with better weekly performances, with Thailand’s SET Index leading the pack with a 0.47 per cent gain. Meanwhile, Singapore’s STI, Malaysia’s KLCI Index and Indonesia’s JCI Index fell 0.38, 0.62, and 0.7 per cent respectively over the week. In other emerging markets, some of the greatest weekly losses were witnessed, with Russia’s RTSI$ Index plunging 4.22 per cent, as the country was perceived to be siding Syria in the US-Syria conflict last week.

Meanwhile, Brazil’s Bovespa Index and India’s SENSEX Index too were met with notable losses, as they fell 3.62 and 1.63 per cent respectively over the week.

 

Singapore: Improvement in exports to support growth over coming quarters

The advance estimate of Singapore’s 1Q17 GDP growth released last week showed the city to have grown by 2.5 per cent year-on-year, missing expectations of a 2.6 per cent growth and coming in lower than prior quarter’s 2.9 per cent growth. Simultaneously, the city’s central bank, the Monetary Authority of Singapore (MAS), had announced that it will be maintaining its neutral policy stance of a zero appreciation of the S$NEER policy band, citing expectations of a modest GDP growth in 2017 and an increase in inflation driven by higher oil prices rather than demand factors, among others.

While the MAS has struck a cautious tone regarding the outlook of the city’s growth, it remains likely that the city’s growth over the next few quarters would be supported by the continued recovery of the global semiconductors sector and a stronger external demand amid a stabilising global economy, given the country’s substantial orientation towards external trade.

At this juncture, the country remains reasonably well-positioned to see its economic growth for 2017 come in at an improvement from its two per cent growth in 2016.

 

China: March consumer price index up slightly from February

For the month of March, China’s consumer price index came in at 0.9 per cent year-on-year, marginally missing expectations of a 1.0 per cent increase in prices and was up slightly from prior month’s 0.8 per cent increase.

Food prices had weighed on the overall price index for the month, as they fell 4.4 per cent year-on-year, with the prices of fresh vegetables falling 27.9 per cent year-on-year. Meanwhile, non-food prices rose 2.3 per cent year-on-year, with prices in the healthcare segment rising the greatest (by 5.3 per cent year-on-year).

 

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