Global stock markets catch fever from the Wall Street
Global stocks fell precipitously this week as investors were spooked by a jump in U.S inflation, prompting fears that the Fed will tighten monetary policy.
However, global stocks pared losses on Friday after dovish comments from Fed officials allayed fears of an abrupt end to reflation trade.
In the U.S, the DJIA (-2.2%) and S&P (-2.8%) suffered huge losses as investors sold off heavyweight “FAANG” stocks, following the Labour Department report which showed that consumer prices increased by the most in nearly 12 years- this made investors re-assess lofty valuations of tech stocks.
In Europe, the STOXX Europe (-1.4%) and FTSE 100 (-1.7%) were on course for their worst week since February as risk sentiment waned due to the sell-off in U.S and Asia.
In Asia, the Nikkei 225 (-4.3%) mirrored the rout on Wall Street. In comparison, the SSE (+2.1%) bucked the trend in global equities and halted a three-week decline as sentiments were lifted by a resilient U.S labour market report which helped soothe inflation concerns.
Emerging markets (MSCI EM: -4.1%) posted losses consequent to the weakness in India (-1.0%), which masked gains in China (+2.1%), while Frontier (MSCI FM: -0.1%) market stocks declined marginally, primarily driven by the sell-offs in Kenya (-3.2%) which masked gains in Nigeria (+0.8%).