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Positive impetus lure investors out of the defensive again

On Wall Street, interest rate concerns receded somewhat into the background and lured investors out of hiding. On Asia's stock exchanges, a much stronger-than-expected purchasing managers' index for China's service sector provided a tailwind. In Europe, the focus was on the latest inflation data. Although the overall inflation rate declined again, the core inflation rate rose to a record high in February. The ECB is likely to have taken note of this development with a view to further interest rate hikes. 

Alessandro Fezzi, LGT
Temps de lecture
5 minutes
Stock broker

Asia-Pacific stock markets mostly gained on Friday, following the gains on the New York Stock Exchange. Positive momentum was provided by the Caixin/S&P Global purchasing managers' index for the Chinese service sector. The PMI recorded a jump from 52.9 to 55.0 points in February, signalling quite solid growth in this sector of the economy. In Tokyo, the Nikkei 225 climbed 1.5%, leading gains in the region. In Hong Kong, the Hang Seng Index gained 0.7% and the Hang Seng Tech Index rose about 1.6%. In mainland China, however, the Shanghai Composite and Shenzhen Component slipped slightly by 0.2% before the weekend. 

The Dow Jones Industrial closed on Thursday at 33’003.57 points, representing a daily gain of 1.05%. This, even though the benchmark yield of ten-year US government securities held above the 4%-mark. A positive impulse was provided by the shares of the US software manufacturer Salesforce, which rose by up to 16% after strong quarterly figures and an optimistic view. The broad S&P 500 improved 0.76% to 3’981.35 points, holding the 200-day line. On the Nasdaq technology exchange, the indices rose by about 0.9%. 

The European benchmark stock market index EuroStoxx 50 gained 0.6% yesterday. The focus here was primarily on the inflation trend in the eurozone. Consumer price inflation continued to decline in February. Accordingly, the inflation rate for the year was 8.5%. compared with 8.6% at the beginning of the year. Economists had expected an even steeper decline to 8.3%. On a month-on-month basis, however, the cost of living in the eurozone increased by 0.8% (consensus 0.5%). In addition, a warning signal, especially for the European Central Bank (ECB), is likely to come from the rise in the core annual inflation rate, which picked up from 5.3% to a record of 5.6% in February.

Corporate news today in focus: Lufthansa with annual figures and Allianz with its annual report.

Economic data today in focus: Purchasing managers' indices for the service sector in Italy, France, Germany and the eurozone as well as the UK. In the US, the ISM purchasing managers survey among service companies.

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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