View the article online at http://citywire.co.uk/money/article/a764046
The Accumulator: emerging markets keep rising
Our exclusive Accumulator table shows all global markets were up in the week ending Thursday, apart from a small fall in Russia.
After last week’s momentous geopolitical events, markets this week rose, largely on the basis that while things weren’t getting particularly better, at least they weren’t getting worse.
Our exclusive Accumulator table shows all global markets were up in the week ending Thursday, with the unsurprising exception of Russia – and even that was only down 0.4%.
The FTSE World rose 1.3% over the period, with emerging markets posting particularly strong returns.
The MSCI Emerging Markets index is now approaching levels last hit in January 2013 levels, before a grim year for investors in the region unfolded. Up 2.2% over the last week, it’s now 7.3% up over the year. Dovish sounds from the US over interest rates have helped the region put a difficult 2013 behind it, despite the geopolitical instability in the Ukraine.
Elections have also helped: Indian stocks notched up another 3.2% rise this week, meaning the country’s CNX Nifty index is now up 25.8% over the year, largely buoyed by the election of markets-friendly prime minister Narendra Modi. In Brazil, meanwhile, doubts over the re-election of leftist president Dilma Rousseff (pictured) has injected more impetus into a rallying stock market, now up 16.7% over the year.
Positive news from China has also had an effect. This week the world’s second-largest economy reported its factory sector expanded at the fastest rate in 18 months in July, following news earlier in the month that gross domestic product grew 7.5% in the second quarter of the year. China's Shanghai Composite index rose 3% over the week, while Hong Kong’s Hang Seng index registered the biggest gain of the major country indices this week, up 3.5%.
Even Russia, in the midst of the Ukraine plane crash crisis, is down only 0.4%, although that figure does not capture further market falls today on European Union proposals for stricter sanctions.
The UK’s FTSE 100 index has ended the week up, yet its modest rise of 1.1% shows that while investors may have regained some confidence following last week’s events, caution still prevails. Likewise in the US, where the S&P 500 is now trading – again – at all-time highs, but only 1.1% up over the week. It’s been a good week for tech stocks in the States, with Apple (AAPL.O) announcing bullish results, and Facebook (FB.O) climbing on stronger-than-expected revenue growth.
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by Gavin Lumsden on Jul 01, 2016 at 17:30