January 29, 2010
Global markets: Weekly overview
Bearish sentiment is prevailing on the market: oil is below $74/bbl and metals prices have started to decline amid lingering concerns about global economic recovery.
The U.S. equity market fell at the beginning of the week on concern that the Federal Reserve will withdraw stimulus measures. Stocks rebounded on Wednesday after the Fed decided to keep interest rates at historic lows in order to help the economy continue to recover. However, stocks resumed their slump on Thursday, falling to near a three-month low after Qualcomm, the biggest maker of mobile-phone chips, lowered its sales forecast. Wall Street indexes lost more than 1% on average.
Markets in Asia declined for a second straight week, interspersed by a short rebound on Wednesday after U.S. President Barack Obama proposed measures to stimulate U.S. economic growth. Regional indexes declined over the rest of the week, losing 3–4%.
The Russian equity market also weakened, in line with global markets. The RTS Index lost 2% and the MICEX Index was off 1%. Among oil and gas names, Rosneft (down 5.7%) posted the heaviest losses due to talks over a possible end to tax breaks on certain oil fields. Metals producers were weak as well, Severstal GDRs dropping 1.1% and Evraz Group GDRs down 4.5% w-o-w. Financial names were among the few stocks to finish the week in positive territory, Sberbank up 0.6% and VTB rising 4.2% w-o-w.