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MARKETS MAJORS WENT THROUGH MARGINAL CORRECTION


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US

US stocks finished sharply lower on Friday, with the Dow Jones losing 166 points to 34585, close to levels not seen in 2 months. The S&P 500 dropped 41 points to a one-month low of 4433 dragged down by materials and technology sectors and the Nasdaq declined 138 points to a near 3-week low of 15044. Investors are cautious ahead of a highly-anticipated FOMC meeting next week when the Fed is expected to provide more details on the tapering timeline. Recent economic data painted a mixed scenario, increasing doubts on when the Fed will start cutting stimulus. The Michigan consumer sentiment disappointed and continued to point to the least favorable economic prospects in more than a decade. Also, retail sales unexpectedly rose and inflation eased more than expected while jobless claims were above forecasts and the payrolls report disappointed. On the week, the Dow lost 0.1%, a 3rd straight week of losses. The S&P 500 fell 0.6%, its second consecutive drop. The Nasdaq declined 0.5%.

GERMANY

The DAX 30 sank 1% to a 2-month low of 15490 on Friday, as global growth concerns, the lingering threat of COVID-19 and tighter regulation of Chinese firms continue to weigh on sentiment. Investors are also bracing for next week's central bank policy meetings, including those from the Federal Reserve and Bank of England, as a batch of economic data from the US and UK released this week casted doubt on the central banks' timeline to begin asset tapering. On the week, the DAX 30 lost 1.3%.

ITALY

The FTSE MIB reversed course to end 1% lower at 25710 on Friday, in line with its European peers, as investors cautiously assessed the impact of recent measures approved by the Italian government, making it obligatory for all workers either to show proof of vaccination, a negative test or recent recovery from infection. Meanwhile, concerns over slowing global recovery and uncertainty on when the Fed will start cutting stimulus continued to weigh on market sentiment.

JAPAN

The Nikkei 225 advanced 177 points or 0.58% to close at near 31-year highs at 30,500, posting its fourth straight weekly gain, amid hopes for new leadership in Japan that would compile fresh stimulus to support domestic economic recovery. Meantime, Tokyo reportedly is considering convening an extraordinary parliamentary session on October 4th to elect the successor to outgoing Prime Minister Yoshihide Suga. Risk appetite was also buoyed by upbeat US retail sales data, along with BoJ's reports today that household financial assets in Japan rose 6.3% yoy at the end of June to a record JPY 1,992 trillion. On the pandemic side, a Japan panel voiced concerns Thursday that new cases may increase after the upcoming holidays and the start of new school terms at universities. Medical service platforms M3 led the gains with a 4.91% rise, followed by chip-related stocks Tokyo Electron (1.24%) and Advantest (2.26%).

CHINA

The Shanghai Composite Index went up 7 points or 0.2% to finish at 3,614 on Friday, reversing from a slight fall in the early session, after reports that the PBoC today injected a total of CNY 100 billion of reverse repos to maintain liquidity in the banking system, the most since February. For the week, however, the index sank 2.4%, dragged down by Beijing's regulatory crackdown after a series of overhaul on industries and sporadic COVID-19 cases in China. In Hong Kong, shares added 1% after plunging to a near 11-month low Thursday. For the week, however, the Hang Seng index tumbled 4.9%, as traders were nervous following reports that Macau began an overhaul of the rules governing 'Asia's Las Vegas'. The SSE will be closed on September 20th and 21st for the Mid-Autumn Festival.

INDIA

The BSE Sensex was down by 125 points or 0.21% to close at 59,015.89 on Friday, giving up most of its early morning gains and retreating from all-time highs yesterday. Capital goods, pharma and consumer goods stocks were the main draggers. On the other hand, banking stocks surged as the Finance Minister pledged to provide USD 4.2 billion in guarantees to National Asset Reconstruction Company Ltd (NARCL) to acquire stressed assets of around USD 27.2 billion from the banking sector. Among the individual stocks, Tata Steel lost (-3.57%) the most while Kotak Mahindra Bank led the gains (+5.26%). Meanwhile, investors are waiting for the results of India’s 45th Goods and Services Tax (GST) Council Meeting, which will set the tone of Monday’s session. On the week, the BSE Sensex booked a 1.2% gain.





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