Market Monitor - 22 October 2021
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Market Monitor – 22 October 2021

It has been a mixed week for global stock markets with indices in the United States and China ending up ahead of their European counterparts. Concerns about international supply chain problems continue to affect investor sentiment in Britain and the eurozone, while the rising number of new Covid-19 infections in the UK has raised the spectre of fresh coronavirus restrictions on this side of the Atlantic this winter.
Trading at the start of the week was overshadowed by gloomy economic news out of China: GDP numbers came in below expectations, reflecting the impact of rising energy prices on the country’s manufacturing sector. And on Thursday, news that the stricken property giant Evergrande had failed in its bid to offload a $2.6bn stake raised new fears of global market disruption.

The US

On Wall Street, however, investors have chosen to focus on the positives, with the Dow Jones Industrial Average ending trading on Thursday 0.9% up for the week so far while the S&P 500 closed 1.6% ahead.
Share prices in America have been bolstered by yet more strong earnings reports, while Apple’s latest product unveilings have help to fortify the US technology sector. Meanwhile, the latest signs from Washington that President Biden may be able to salvage his multi-trillion-dollar infrastructure bill provided an extra shot of optimism.
There was also some good news about the American economy, with the number of new unemployment claims falling once again to their lowest level since the pandemic hit.

The UK & Europe

In the UK, the FTSE 100 closed on Thursday 0.6% down for the week, as Britain continued to struggle with shortages and rising Covid-19 rates. The outlook was not helped by signs from the Bank of England that interest rates may have to rise before the end of the year to combat spiralling inflation.
Some respite was offered by September’s inflation figure, which was 3.1% compared to 3.2% in August. However, experts believe prices will continue their upward trend as we move into 2022 – and that central bank action is inevitable.
Travel stocks in the UK suffered their latest falls this week as speculation mounted that the government may be forced to reintroduce restrictions on international travel if the latest coronavirus surge gets worse in the weeks ahead.
In Frankfurt, the DAX index ended Thursday’s session down 0.7% for the week, while France’s CAC 40 lost 0.6%. Investors in the eurozone are watching the latest pandemic developments in Britain with interest and no little concern. Meanwhile, consumer confidence across the European Union as a whole has fallen even more sharply in October.

Asia

In Asia, the Hang Seng index in Hong Kong managed to record strong gains despite concerns about the Chinese economy and the re-emergence of the Evergrande crisis: it had gained 2.7% by Thursday’s close. In Tokyo, however, it was another negative week with Japan’s Nikkei 225 index of leading shares ending 1.2% down.
October 15
October 21
Change (%)
FTSE 100
7234.0
7190.3
-0.6
FTSE All-share
4124.0
4102.3
-0.5
S&P 500
4471.4
4549.8
1.8
Dow Jones
35294.8
35603.1
0.9
DAX
15587.4
15472.6
-0.7
CAC 40
6727.5
6686.2
-0.6
ACWI
733.0
742.5
1.3
Hong Kong Hang Seng
25331.0
26017.5
2.7
Nikkei 225
29068.6
28708.6
-1.2

Note: all market data contained within the article is sourced from Bloomberg unless stated otherwise, data as at 21/10/2021.

22 October 2021
Mark King
Mark King
Head of Investment Content
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Market Monitor – 22 October 2021

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