The Dow Jones added more than 150 points in shortened trading on Friday while the S&P 500 was little changed as investors reassessed the outlook for monetary policy while looking for clues on consumer health as Black Friday shopping started. The Nasdaq underperformed, falling roughly 0.5%, as shares of Activision Blizzard closed down more than 4% following news that the FTC was planning to file an antitrust lawsuit to prevent Microsoft from acquiring the videogame publisher. Investors also digested the latest move from China, with the central bank cutting the reserve requirement ratio for banks by 25 basis points to shore up growth in an economy battered by persistent coronavirus-induced restrictions and real estate crises. Investors continued to parse the minutes from the last Fed meeting, with policymakers seeing the case for slower interest rate hikes while recognizing that recession risks are rising. For the week, the Dow gained 1.8%, the S&P 500 1.5% and the Nasdaq 0.7%.
European equity markets edged up on Friday, with the STOXX 600 advancing for a sixth straight week for the first time since October last year, amid further signals that central banks might not end up hiking as aggressively as feared. While the European Central Bank's meeting accounts showed policymakers agreed to tighten policy further but suggested that a prolonged and deep recession would lead to a pause to the ongoing interest rate increases. Among single stocks, Credit Suisse dropped nearly 6% to 3.35 Swiss francs, a record low. Domestically, the German DAX also closed higher, and notched its eighth consecutive week of gains, after quarterly economic growth was revised higher to 0.4% in the third quarter, and consumer confidence in the country improved for the second month heading into December.
The Shanghai Composite rose 0.4% to close at 3,102 while the Shenzhen Component fell 0.48% to 10,904 in mixed trade on Friday, as Covid-related concerns in China countered fresh support for the country’s ailing property sector. China continued to grapple with surging Covid cases that stoked fears of wider restrictions and clouded the outlook further for the world’s second-largest economy. Meanwhile, the country’s largest banks have pledged at least $162 billion in new loans to property developers in a move that analysts hope could boost economic growth. Top government officials also signaled more monetary stimulus ahead to support the economy, including a possible cut to the reserve requirement ratio. Growth-oriented new energy, healthcare and technology stocks declined, while property, industrial and consumer-related firms advanced.
The BSE Sensex closed 20 points above the flatline at 62,293 on Friday, slightly extending its record high as gains among Mumbai’s heavyweight auto manufacturers offset losses for banks. Tata Motors and Hero Moto rose 2.3% and 1.5%, respectively, to lead the gains in India’s benchmark stock index as signs of lower energy demand in China could ease gasoline prices. On the other hand, ICICI Bank led the losses among lenders with a 1% retreat. On the week, the Sensex closed 1% higher.
The Nikkei 225 Index fell 0.35% to close at 28,283 while the broader Topix Index shed 0.04% to 2,018 on Friday. Investors also reacted to data showing core consumer prices in Tokyo, a leading indicator of nationwide price trends, surged to a 40-year high of 3.6% in November amid broadening inflationary pressures. Technology stocks led the retreat, with notable losses from Tokyo Electron (-0.8%), Keyence (-1.5%) and Advantest (-1%). Other index heavyweights also declined such as Fast Retailing (-0.8%), Sony Group (-0.8%) and Kawasaki Kisen (-1.1%), while notable gains were seen from SoftBank Group (0.3%), Mitsubishi UFJ (1%) and Toyota Motor (0.4%).