European stocks closed slightly higher on Friday after a rocky start, with the DAX ending almost flat and the regional Stoxx 600 0.4% higher, with travel & leisure stocks up 2.4% and leading broad gains. Investors continued to digest fresh earnings, the latest changes in the ECB’s monetary policy, and fresh economic data. On the earnings front, Delivery Hero closed 5.5% higher after forecasting smaller losses for 2022, tobacco group Swedish Match posted upbeat Q2 earnings. Meanwhile, Uniper shares slumped 25% on news of the government's $15B bailout and nationalization of a 30% stake in the utility giant. On the data front, preliminary July PMI data showed the German, the French and the Eurozone manufacturing sectors unexpectedly contracted, while in Germany, the service sector activity also surprisingly fell. For the week, the DAX and the Stoxx 600 eyed gains of 3.3% and 3.0%, respectively.
The Dow Jones lost around 150 points on Friday, while the S&P 500 and the Nasdaq 100 dropped 0.9% and 1.9%, respectively, as investors digested a slew of disappointing corporate earnings reports and weak economic data. Twitter reported weaker-than-expected earnings, revenue, and user growth for the second quarter. A dismal outlook from the social media giant followed disappointing results from Snap, which tumbled almost 40%, sending shockwaves through other social media companies, including Meta and Pinterest. Verizon dropped around 7% after missing Wall Street's estimates while offering weak guidance. On the data front, the US business activity contracted in July for the first time in nearly two years, pressured by a sharp slowdown in the service sector, intensified worries over the economic outlook. Still, the Dow rallied almost 2% for the week, while the S&P 500 and the Nasdaq outperformed by adding 2.5% and 3.5%, respectively.
The Shanghai Composite shed 0.06% to 3,270 while the Shenzhen Component lost 0.49% to 12,394 on Friday, sliding for the second straight session and lagging behind Asia Pacific peers, with healthcare and technology stocks leading the decline. Concerns that resurgent Covid-19 outbreaks and an ongoing property crisis would hurt China’s growth prospects weighed on sentiment throughout the week. Investors are also bracing for the Federal Reserve policy meeting next week, as rising US interest rates at a time China is pressured to keep policies accommodative could speed up capital outflows in the country. Losses in the high-growth healthcare and technology sectors were led by Andon Health (-3.3%), Shijiazhuang Yilin (-3.9%), Jiangsu Hoperun (-6.4%), Goertek (-3%), Naura Technology (-2.6%) and Luxshare Precision (-2.3%).
The BSE Sensex jumped 390.28 points or 0.7% to close at a 11-week high of 56,072.23, booking a 4.3% weekly gain, boosted by increased foreign investment and solid quarterly results of banks. Gains were led by capital goods, banks and consumer goods. Ultracement company topped the index (+5.03%). Banking stocks followed. Twin stocks HDFC and HDFC bank each added around 2.4%, followed by Axisbank and ICICI bank among others. In contrast, technology stocks dragged, led by Infosys (-1.73%).
The ruble-based MOEX Russia Index closed 2.1% higher at 2,095 on Friday, rebounding from the lowest close in five years yesterday after the CBR delivered a larger than expected interest rate cut of 150bps to 8%, taking the key rate to below its pre-invasion level. The central bank lowered inflation expectations for the coming years and also said that the decline in business activity is slower than previously thought, despite prolonged constraints given the external backdrop. Lower borrowing costs supported sharp gains in the tech, energy, financial, and real-estate sectors, with TCS Group and Yandex adding more than 5.5%, while Lukoil gained 4.2%. On the other hand, miners continued to underperform as investors further to digested poor earnings by Polymetal and the omission of results by Severstal. Elsewhere, the Russian delegation agreed to open safe trade corridors out of the Black Sea for Ukrainian grain exports. Still, the MOEX fell 0.7% on a weekly basis.
Australia Stock Market Index (Composite) traded at 7012 this Friday July 22nd, decreasing 7 or 0.09 percent since the previous trading session. Looking back, over the last four weeks, AUALL lost 4.79 percent. Over the last 12 months, its price fell by 8.59 percent. Looking ahead, Australia Stock Market Index (Composite) expected to be priced at 6640 by the end of this quarter and at 6189 in one year, according to Trading Economics global macro models projections and analysts’ expectations.