Market Commentary – March 08, 2022

Kevin Jock

8th March 2022

U.S. equity markets sank significantly during Monday’s trading sessions, on concerns of Russian invasion of Ukraine that could negatively affect global economic growth which has already been dampened by the pandemic. The S&P 500 dipped almost 3%, while the Nasdaq index dropped 3.62%, fell into the bear territory. Share prices of travel-related companies dropped with the escalating oil prices which drove up fuel prices.

European stocks suffered as well, with the broad benchmark index EURO STOXX 50 slid 1.23%, while the German DAX skid nearly 2%. In Eastern Europe, Russian armies intensified their shelling of major Ukrainian cities as their advance in land has stalled due to fierce resistance from the Ukrainian forces, as well as logistic issues faced by the Russians. Third round of negotiations between Kyiv and Moscow did not make any significant breakthroughs, with only some small positive developments in improving the logistics of humanitarian corridors.

Across Asia, both the ASX 200 and Nikkei 225 indices dropped marginally on Today’s morning trading session, fell by 0.4% and 0.6% respectively. In contrast, the Shanghai Composite Index in mainland China continue to plummet following yesterday’s drop, as it has broken 3,300 points to reach a new low since 16 months ago. HK’s Hang Seng Index is no near better, with the index continue to trade below 21,000 points before the mid-day break.

Both the oil and natural gas prices fluctuated dramatically on Monday, when U.S. attempted to ban Russian crude while Germany is reluctant to do so. Brent crude shot up to as high as $139.80 since yesterday, the highest level since 2008, then retraced back to currently trade at $127.88. Gold price jumped as well, which has literally broken above the $2,000 per ounce level, then dipped slightly to settle at $1,997.57 as of yesterday. The Euro was knocked down to as low as $1.08059 against the greenback during yesterday’s trading session, which is near a 22-month low as the war in Ukraine darkened Europe’s economic outlook.

image_2022_03_08T05_51_23_219Z

Figure 1 (Source: IS Prime) IDX.DE.30 : Germany’s benchmark share index has fallen into a bear market, since it has dropped more than 20% from its record closing high in January. Such hit was simply because the country relies on Russian energy imports and the escalating war has created massive uncertainty on the Europe’s largest economy.

 

 Headliner to Review

  • German Factory Orders statistics turns out to increase by 1.8% in January 2022, higher than the expected figure of an increase of 0.9%. Such increase of new orders in manufacturing is mainly due to orders abroad, as new orders from the non-euro area rose by 17%.
  • Unemployment rate in Switzerland came out to be 2.2%, further improved by 0.1% from last month.

Headliner to Watch

  • CPI figure in China is expected to hike by 0.9% year-to-year, while its PPI is forecasted to increase by 8.5% year-to-year.
  • Final quarter over quarter GDP data in Japan is due to release on Wednesday, expect to increase by 1.4% compared to 1.3% from the previous quarter.

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Authors:
Antony Tan
Kerry Man