US Stocks Close Sharply Lower on Plunging Chip Stocks, Mixed Data
US stocks ended sharply lower on Friday, August 18, 2023, as plunging chip stocks and mixed economic data dampened investors’ risk appetite. The S&P 500 and the Nasdaq reversed their weekly advances, while the blue-chip Dow ended the week nominally higher.
The Philadelphia SE Semiconductor index slid 3.0% in the wake of a Reuters report that Taiwan’s TSMC asked major suppliers to delay delivery of high-end chipmaking equipment. The news raised concerns about a potential slowdown in the global semiconductor industry, which is a key driver of economic growth.
On the economic front, data released on Friday was mixed, with import prices jumping, industrial production beating expectations, and University of Michigan consumer inflation expectations cooling. The data cemented expectations that the Federal Reserve will leave its key interest rate unchanged at the conclusion of next week’s monetary policy meeting, but it also fueled concerns that inflation may remain elevated for some time.
The Dow Jones Industrial Average fell 288.87 points, or 0.83%, to 34,618.24, the S&P 500 lost 54.79 points, or 1.22%, to 4,450.31, and the Nasdaq Composite dropped 217.72 points, or 1.56%, to 13,708.34.
European stocks closed higher, extending a rally sparked by the European Bank signaling an end to its rate-hiking cycle. The pan-European STOXX 600 index rose 0.23% and MSCI’s gauge of stocks across the globe shed 0.63%.
Emerging market stocks rose 0.33%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.58% higher, while Japan’s Nikkei (.N225) rose 1.10%.
Treasury yields rose ahead of the Federal Reserve policy meeting next week, with two-year yields edging above the 5% threshold amid worries that restrictive interest rates will be in place for longer than expected. Benchmark 10-year notes last fell 10/32 in price to yield 4.3304%, from 4.29% late on Thursday.
The dollar inched lower against a basket of world currencies, but nabbed its ninth straight weekly gain. The dollar index fell 0.08%, with the euro up 0.16% to $1.0658.
Oil prices continued to climb, notching their third consecutive weekly gain on supply tightness and optimism that the Chinese economy is gaining strength. US crude rose 0.68% to settle at $90.77 per barrel, while Brent settled at $93.93, up 0.25% on the day.
Gold prices surged, bouncing off three-week lows in opposition to softness in the greenback. Spot gold added 0.7% to $1,922.69 an ounce.
The US stock market’s sharp decline on Friday was a reminder of the fragility of investor sentiment and the potential for volatility in the coming weeks. The Fed’s policy meeting next week will be a key event, as investors look for clues about the central bank’s plans for future interest rate hikes.
- 22 Sep
Technical Analysis Report for Nifty and Three Buy Calls
The Nifty index has been on a strong uptrend in the past three weeks, but it has recently retraced some of those gains. It is now expected to oscillate within the 19,605 to 19,878 range over the next few sessions. Three stocks that look good for buying over the next 2-3 weeks are Havells India, KSB, and Gujarat Ambuja Exports. All three stocks have strong bullish momentum and are trading above their key moving averages.
- 22 Sep
Maruti Suzuki Stock Gains on Bullish Stance from Global Brokerages
Maruti Suzuki stock gains on bullish stance from global brokerages Shares of Maruti Suzuki India surged on Friday after global brokerages Citi and Morgan Stanley maintained bullish stance on the counter. Both brokerages cited the company's improving product mix and attractive valuation as key reasons for their optimism. In addition, Maruti Suzuki reported strong sales performance in August 2023, with total domestic sales jumping 14 percent year-on-year and sale of utility vehicles jumping 118 percent year-on-year. Overall, the bullish stance from global brokerages and the company's strong sales performance are providing a boost to Maruti Suzuki stock.
- 22 Sep
PNB Gilts Hits Upper Circuit on Inclusion of Indian Bonds in JPMorgan Index
Shares of PNB Gilts hit upper circuit on September 22, 2023, following news that India's inclusion in JPMorgan's bond index is seen driving billions of dollars of inflows. The index provider will add Indian bonds to its widely-tracked emerging market index starting June 28, 2024. PNB Gilts is a primary dealer in government securities and other fixed-income instruments. The inclusion of Indian bonds in JPMorgan's index is expected to attract significant foreign inflows, which is likely to benefit PNB Gilts and other primary dealers in government securities.
- 22 Sep
Indian Bond Markets to Remain Stable in Near Term After JPMorgan Inclusion
Indian bond markets are expected to remain stable in the near term after JPMorgan's inclusion of India in its widely tracked emerging market debt index, according to BlackRock's head of Asia Pacific fixed income, Neeraj Seth. Seth expects inflows of around $20 billion to $25 billion into India after the maximum weight threshold is achieved on the GBI-EM index. Given the size of the global government bond market, this is relatively small and is unlikely to have a significant impact on volatility.
- 22 Sep
Indian market drops on September 22 despite inclusion of Indian bonds in JP Morgan index
Indian benchmark indices Sensex and Nifty fell for the fourth consecutive day on September 22, despite the inclusion of Indian bonds in the JP Morgan Government Bond Index-Emerging Markets (GBI-EM) global index suite from June 2024. The market is expected to remain volatile in the near term, with key support at 19,600 for Nifty.