All three US stocks finished lower on Friday, in line with their global peers as lingering worries of recession mounted caused by tight monetary policies, pressuring crude oil prices. The Dow Jones closed 219 points lower, the S&P 500 and the Nasdaq lost 0.7% and 1%, respectively. This Week, Fed Chair Powell said that the central bank could still push rates through a couple more hikes by the end of this year. On the data front, Fresh PMIs for the US showed the services sector remained robust last month but manufacturing sank the most so far this year and way more than expected. In Europe, PMI data showed that Europe's economy appears to be weaker than expected. Among stocks, Exxon mobil and Chevron fell 0.8% each. Nvidia and Microsoft finished 1.9% and 1.4% lower. The three benchmark stock indexes are on track to end the week lower. On the week, the Dow fell 2%, the S&P 500 and the Nasdaq dropped 1.8% and 2%, respectively.
European shares fell for a fifth consecutive session on Friday and booked a nearly 3% weekly loss, the most since March, as investors grappled with the impact of major central banks' monetary tightening measures along with disappointing economic data. Germany's DAX fell 1% to a four-week low of 15,830 with Siemens Energy's shares plummeting 37% after the company withdrew its annual profit outlook. Meanwhile, the latest PMI survey revealed that business growth in the Eurozone nearly stagnated in June, due to a slowdown in service activity growth and a more pronounced contraction in manufacturing. Adding to woes, expectations of further rate hikes by the ECB and the US Federal Reserve along with a larger-than-anticipated 50-basis point rate hike by the Bank of England amplified concerns about the economic repercussions of curbing inflation.
The Shanghai Composite dropped 1.31% to close at 3,198 on Wednesday, sliding for the third consecutive session as the central bank’s interest rate cuts were deemed insufficient to support growth. The Shenzhen Component also tumbled 2.18% to 11,059, its second negative day in three. The People’s Bank of China lowered both its one-year and five-year loan prime rates by 10 basis points on Tuesday after cutting two other short-term lending rates last week, the first such move since August last year. Meanwhile, analysts suggested that those policy moves were not enough to bolster the economic rebound, raising expectations that Chinese authorities would ease policy further. High-growth technology stocks led the decline, with sharp losses from Inspur Electronic (-5.4%), Kunlun Tech (-20%), Zhongji Innolight (-5.9%), iFLYTEK (-4%) and Dawning Information (-8.4%). Chinese markets will be closed on June 22-23 for a holiday.
The BSE Sensex closed 260 points lower at 62,980 on Friday, dropping for the second session and losing 0.6% on the week despite the record-high close from Wednesday, pressured by concerns of higher interest rates by major monetary authorities across the world. Shares in the technology sector that have large exposure to consumer sentiment in Europe and the United States continued to book losses, with Tech Mahindra, TCS, and Infosys all closing firmly in the red. Auto manufacturers’ shares also declined, with Tata Motors sinking 1.5% while Mahindra & Mahindra and Maruti Suzuki fell 0.5%. Outside the Sensex, Adani Group shares plunged after a report from Bloomberg News suggested that the firm was facing regulatory scrutiny in the US over its response to the Hindenburg report from February year.
The S&P/TSX Composite index ended 0.8% lower to close at three-month low of 19,420 mark on Friday, dropping for the sixth consecutive session and booked a 2.6% decline on the week amid persistent concerns that aggressive interest rate hikes will hamper corporate performance. Energy producers once again led the losses for the session as Canadian Natural Resources and Suncor Energy fell 0.8% and 0.9%, respectively, amid low demand from China and hawkish signals from the Fed pressured crude oil prices. The heavyweight banking sector dropped as Royal Bank of Canada (-0.8%), TD bank (-0.7%) and BMO (-1.3%) fell. On the other hand, bullion prices rebounded from their recent rout and supported some respite for gold miners.
The S&P/ASX 200 Index plunged 1.34% to 7,099 on Friday, sliding for the third consecutive session and closing at its lowest level in almost a month as investor sentiment took a hit this week after US Federal Reserve Chair Jerome Powell indicated the need to tighten policy further to bring down inflation. Investors also digested data showing Australian manufacturing activity contracted for the fourth straight month in June, while services activity slowed. Energy stocks led the retreat amid a sharp drop in oil prices overnight, with sector leaders Woodside Energy and Santos losing 4.7% and 4.6%, respectively. Financial stocks also posted notable declines, including Commonwealth Bank (-1.6%), ANZ Group (-2.2%) and Macquarie Group (-1.8%). Mining, technology and healthcare stocks slumped as well. The benchmark index declined 2.1% this week.
