January 22, 2010
Global markets: Weekly overview
After two weeks of gains at the beginning of 2010, global markets retreated under pressure from weakening oil, growing concerns over the Chinese economy and poor results from US companies.
The US market began the week in a positive mood, stocks moving higher on Monday and Tuesday. IBM and Morgan Stanley disappointed investors and exerted selling pressure on the market. Stocks fell even further on Thursday after the White House announced that it intended to force banks to reduce risk-taking. As a result, U.S. indices dropped 1-2% w-o-w. WTI was volatile during the week, falling below $76/bbl on Wednesday but recovering slightly on Friday to close the week down 2.5%.
Markets in Asia remained in negative territory through the week. The main triggers for the sell-off were concerns over banking sector earnings and speculation that the Chinese economy needs a cooling-off period following reports that GDP growth accelerated to 10.7% in 4Q09, the fastest pace since 2007. Major indexes closed the week 4% lower.
The Russian equity market moved along with Wall Street and the crude price, advancing on Monday and Tuesday but declining over the rest of the week. The RTS Index dropped more than 4%, while MICEX tumbled around 3%. Both indexes lost most of the gains posted so far this year to close in on end December levels. Most blue chips ended the week in negative territory. NOVATEK was one of a few exceptions. It rose 3.7% on Tuesday after reporting a y-o-y production rise for 4Q09. Following some profit taking, NOVATEK ended the week some 2% higher.