Global Stock Market To Recover in 2019?

Global Stock Market remained subdued to disappointing results from Apple in US, growing signs of a slowdown in China and negative business confidence in Hong Kong. Let’s have a look on three major countries that affects the equity market globally.

US Stock Market

US stock market closed steep lower on Thursday on the back of weaker than expected US manufacturing data and also due to downwardly revised guidance from Apple. The disappointing results from Apple has made the investors negative and reinforced fears among investors that the world’s second-largest economy is weakening.

Further, exporters particularly chipmakers that make components used in smartphones and other gadgets suffered heavy losses, after Apple’s revenue warning, and as of stronger yen. A weak report on U.S. manufacturing also affected the market negatively.

The Institute for Supply Management said its index of manufacturing fell to its lowest level in two years, and new orders have fallen sharply since November. Manufacturing is still growing, but at a slower pace than it has recently.

Chinese Stock Market

The growing signs of a slowdown in China, has overall affected the market, as did the U.S.-China trade dispute, which threatens to affect the multinational companies’ supply lines and reduce demand for their products. In China on 04 January 2019, the investors were encouraged after Caixin Services and Composite PMIs in China rose in December over the previous month. This is the highest in 6 months.

December’s service sector Purchasing Managers Index from media company Caixin came in at 53.9, above the 53.0 expected. Services put in another month of robust growth following a strong 53.8 gain in November. In addition, to the weak manufacturing PMI already released, that gave a composite read of 52.2, which is a five-month high.

This final release completes the December round of PMIs, which is an internationally comparable series in which a reading above 50 is required to show expansion in the sector under survey.

Meanwhile buying was accelerated on expectations of policy support after People’s Bank of China on Wednesday relaxed its conditions on targeted reserve requirement cuts to benefit more small firms.

Hong Kong Market

Hong Kong private sector continued to contract in December, although at a slightly slower rate, the latest PMI from Nikkei showed on Friday with a score of 48.0. That is up from 47.1 in November, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction. Individually, there was a sharp decline in new order, particularly from mainland China. Business confidence remained firmly negative, while inflationary pressures have continued to rise.

2018 has not been such a cheerful year with lots of ups and downs especially due to global trade war therefore investors across global stock markets are very cautious in the new year 2019.