Weekly Global Market Report –Week Ended Feb. 05, 2016

Sentiments across global markets under our coverage were broadly bearish during the week as markets reacted to the swings in oil prices which eventually settled at $34.74 on Friday even as investors assessed potential for talks on a production cut. Also, the strengthening dollar reversed to 3-month lows, depreciating 0.8% against a basket of major currencies on Thursday, thus, escalating expectations that the US Fed will adopt a less hawkish narrative. Although the Yuan strengthened 0.3% (as at Tuesday) to RMB6.50/US$1.00, news of additional rate hikes by major Central Banks coupled with the slowing global growth resulted in negative performance across global indices save a few in the BRICS and African category.

In the BRICS classification, the India BSE Sens and Russia RTS was the lost -1.0% & -0.1% W-o-W. On the Flipside, the Brazil Ibovespa advanced 1.8%W-o-W amidst heightened risk levels within the country on account of persistent political concerns closely trailed by South Africa JSE/FTSE advanced 0.9% W-o-W. The Chinese market rebounded from a negative close last week as the Shanghai Composite index appreciated 0.9% W-o-W on the back of the strengthening Yuan and news flows of growth in FX reserves which stoked investor’s optimism. In the developed markets, the weak performance of financial stocks on the UK FTSE to decline by 2.5%. Similarly, the US S&P 500 and NASDAQ Indices closed down due to high sell offs even as investors await US monthly payrolls report as current data shows a slowdown in factory order in December.

Consequentially, uncertainties around the global macroeconomic space trickled into the Eurasian region as export-oriented auto stocks declined while Y-o-Y loss posted by Credit Suisse sent the market tumbling. The impact was felt the most by the France CAC 40 and German DAX both of which declined 4.1% and 4.4% respectively. Japan's Nikkei index fell 4.0% W-o-W as a stronger Yen hurt market sentiment, while bellwethers such as Panasonic Corp and Hitachi Ltd dived after cutting earnings forecasts. In the African markets, the Nigerian All Share Index and GSE Composite shed 1.7% and 1.1% respectively while the Egypt EGX and Kenya NSE advanced 3.6% and 0.3% W-o-W respectively.

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