Stock futures contracts tied to the blue-chip Dow fell 0.3% on Friday, while those linked to the S&P 500 and Nasdaq were down 0.4% and 0.7%, respectively, as stronger-than-expected US employment and inflation data sparked worries that the Federal Reserve's monetary policy tightening may be far from over. All eyes are now on the PCE report, the Fed's favourite inflation gauge, following a recent bout of market volatility triggered by fears of a higher terminal rate for the Fed funds. Meantime, growing geopolitical tensions between the US and China over the war in Ukraine discouraged investors from turning bullish. Major averages in the US are heading for a weekly decline, with the S&P 500 on track for its worst week since Dec. 5th, the Dow poised for its fourth straight losing week, and the Nasdaq 100 on pace for its second negative week out of three.
Major bourses in Europe were in the green on Friday, extending gains from the previous session, as investors digest fresh economic data, corporate news and as concerns over the need for higher interest rates for a longer period eased. The DAX was up 0.1% and the STOXX 600 added nearly 0.3%, with the construction sector among the top performers. On the corporate front, French building materials firm Saint-Gobain posted a record annual revenue and said it would allocate at least 400 million euros for share buybacks in 2023. Meanwhile, Swedish radiation therapy solutions Elekta reported positive third-quarter earnings while Europe's chemical giant BASF announced plans to cut 2,600 jobs to save costs. On the data front, consumer sentiment in Germany improved heading into March although the GDP in Europe's largest economy shrank 0.4% last quarter, twice the first estimate of a 0.2% fall. On the week, both the DAX and the STOXX 600 are set to loose 0.2%..
The Shanghai Composite dropped 20.32 points or 0.62% to end at 3,267 on Friday, falling for the third session in a row, dented by a pullback in US stock futures amid caution ahead of the release of the PCE index, the Federal Reserve’s preferred price gauge, later today. Traders were also cautious after Thursday's report from the Asia Wall Street Journal that Chinese President Xi Jinping is preparing to shake up the leadership of the country's financial system, reviving a Communist Party body to tighten political control over financial affairs. Meanwhile, the PBoC governor Yi Gang will retire soon with his predecessor being a veteran banker who reportedly is Jinping's key associate. Among large caps, Kweichow Mutai slipped 1.7%, Contemporary Amper lost 1.9%, China Merchants Bank shed 2.1%, and Wuliangye Yibin fell 2%. Still, the index for the week booked a 1.3% surge, buoyed by optimism toward a swift reopening in the mainland economy.
The BSE Sensex erased early gains and closed 140 points lower at 59,460 on Friday, marking its sixth consecutive session of decline and notching a 2.5% slide on the week, its worst in over eight months. Fears of aggressive interest rate hikes by major central banks continued to pressure major sectors of the Indian equity market. Simultaneously, fears of lower industrial demand from China hampered the session for raw material shares, with Tata Steel sinking over 2%. Meanwhile, the finance ministry's monthly economic review for January said the Indian economy is on track to achieve 7% growth for the 2023 financial year, while investors await fresh estimates on the current year’s growth to be released next week.