Global equities ticked upwards for the third consecutive week, with the MSCI AC World index rising 0.54 per cent over the week ended December 15, 2017.
Amid continued discussions regarding tax cuts and Jobs Act over in the US Congress, US equities, as represented by the S&P 500 Index, gained 0.86 per cent over the week, and had led equity performances in the developed market space.
Meanwhile, European equities, as represented by the Stoxx 600 Index, and Japanese equities, as represented by the Nikkei 225 Index, dipped 0.25 and 0.45 per cent respectively over the week.
Gains were witnessed over in Asian and Emerging equity markets over the week as well, with the MSCI Asia ex Japan Index and MSCI Emerging Market Index rising 0.46 and 0.64 per cent respectively over the week.
In East Asia, Taiwan’s TWSE Index, Korea’s KOSPI Index and Hong Kong’s HSI Index, rose 1.1, 1.06 and 0.55 per cent respectively.
Meanwhile, Chinese equities’ performance were mixed over the week, as its offshore HSML 100 Index registered a tepid return of 0.06 per cent, while its onshore equities, as represented by the CSI300 and Shanghai Composite indices, fell by 0.42 and 0.59 per cent respectively over the week.
Over in Southeast Asia, Malaysia’s KLCI Index led with a 1.85 per cent gain, with Indonesia’s JCI Index and Thailand’s SET Index following behind with a 1.31 and 0.97 per cent gain respectively over the week.
Meanwhile, Singapore’s STI ended the week 0.03 per cent higher than where it was when the week started.
In other emerging markets, Russian equities enjoyed a good week, with the RTSI$ Index ending the week as the strongest performer amongst markets our coverage with its 2.51 per cent gain.
Meanwhile, India’s SENSEX Index gained a smaller 1.37 per cent and Brazil’s Bovespa Index dipped -0.57 per cent over the week.
The price of WTI crude oil was little changed over the week, and it dipped -0.10 per cent to US$57.30 per barrel, after having dipped a greater -1.71 per cent the week before.
India: CPI likely faced with upside risks over coming quarters
Consumer prices in India rose 4.88 per cent year-on-year in November, up from the 3.58 per cent increase the month before.
The prices of food and beverages, a segment which accounts for a 45 per cent weight in the CPI basket, surged 4.41 per cent year-on-year in November, up from 2.26 per cent the month before, with some of the largest price increases seen amongst the prices of vegetables and eggs. Looking ahead, there exists upside risks facing the nation’s CPI, including the increase in crude oil prices, HRA benefits for central government employees, farm loan waivers by state governments and risk of fiscal slippages due to rise in government spending on infrastructure.
With inflation moving above the RBI target of four per cent for FY 2018 and given the rise of upside risks to inflation, the central bank is not expected to reduce the policy rates or change the monetary policy stance to accommodative going ahead.
China: Industrial production maintains growth pace above that seen in 2016
In November, China’s industrial production expanded 6.1 per cent year-on-year, down slightly from prior month’s 6.2 per cent growth but was in line with market expectations.
A look into the breakdown revealed the production of cement to have led growth, with a 4.8 per cent year-on-year surge v prior month’s 3.1 per cent contraction; while the production of processed crude oil remained relatively steady, and had expanded eight per cent year-on-year v 7.4 per cent the month before.
On the other hand, the production of natural gas, which grew a mere three per cent year-on-year in November compared to its growth rate in the prior six months (all of which were double-digit), had weighed on overall industrial production growth for the month.
Although the nation’s industrial production growth has moderated from its highs in the beginning of the year, it has mostly remained at levels above that in 2016 in spite of the intensifying pollution crackdown, thus suggesting some underlying resilience in the sector.
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