DUBAI:Global equities, which have been riding high on the dovish stance from the US Federal Reserve, would enter the week with positive sentiment ahead of the meeting between US president Donald Trump and his Chinese counterpart Xi Jinping.
Last week, the Dow Jones Industrial Average was in a striking distance of its record high. The index hit a peak of 26,907.37, just 0.4 per cent or 50 points off from the level of 26,951.81. The S&P 500 index hit a peak of 2,964.15 on Friday, before closing 0.13 per cent lower at 2,950.46.
“Heading into the new week, we are expecting to see further short-term gains for stocks amid bullish technical momentum arising from this week’s central bank action, but we are not too sure whether the bulls will go all out buying every single dip given the increased risks to economic growth and ongoing trade tensions. Speaking of which, the focus will slowly turn to the upcoming G20 meetings in Japan towards the end of next week,” Fawad Razaqzada Technical Analyst FOREX.com said.
Chinese President Xi Jinping will attend the G20 summit in Japan this week during which he would meet his US counterpart Donald Trump for key talks to clinch a deal to end the bruising trade war.
“Global equity markets performed positively during the week on the back of US Federal Reserve’s openness to rate cuts this year and investor sentiments shifting to a more positive view post the comments from the US President indicating constructive discussion with Chinese authorities on the trade dispute ahead of the G20 summit,” Allied Investment Partners said in a note.
The Dow Jones has been on a gaining streak so far in year with gains of 14.54 per cent, and president Trump has often considered the index performance as a barometer of his performance.
“The focus will slowly turn to the upcoming G20 meetings in Japan towards the end of next week. Donald Trump has already told us that he had a good phone conversation with Chinese Premier Xi and that their teams will be meeting ahead of the G20 summit in preparations. Fresh comments via Trump’s twitter handle on this topic could move the markets, so watch out,” Razaqzada said.