Dubai: With stocks worldwide on track to close out the month of November with some of the biggest gains ever, thanks to positive news on vaccines, investors are still hoping for more clues on economic turnaround.
Ahead of a busy week that includes some more key economic data, which will give more clarity on how economies are currently functioning amid a pandemic that continues to rage in some parts of the world, markets globally have been gaining on hopes that an end was in sight to contagion-induced uncertainty.
Stock markets saw a historic monthly run accompanied by a recent shift in leadership, which led to sectors left behind in the pandemic rally, staging a comeback against the large-capitalization tech and internet-related shares of firms that benefited from the largely work-from-home culture.
During the month investors were favouring stocks that would benefit from a rebounding economy and showing less love for long-held favourites among big tech and internet names. The stocks that gained were supported by investor bets that vaccines would help the economy return to normal next year.
US equities reached new highs
US equities reached new highs last week with the Dow Jones benchmark having added 12.7 per cent month-to-date. The UK’s FTSE 100 performed even better with gains of 14.6 per cent as many of its components benefit from a global recovery. Meanwhile, in Japan the Nikkei index hit a fresh 29-year high.
The week ahead could bring a test as investors focus on first-tier economic indicators, including the US Institute for Supply Management’s manufacturing report on Tuesday and its services report on Thursday.
Other key economic indicators include weekly data on US jobless benefit claims on Thursday, which have shown two consecutive increases in first-time applications for benefits for the first time since July. On Friday, the November jobs report is due from the US Labor Department.
More data from Europe, China
Private sector PMIs for Spain and Italy and PMIs for France, Germany, and the Eurozone are also due this week. On Tuesday, German unemployment figures will also be in focus alongside the manufacturing numbers. Mid-week, German retail sales figures are due ahead of German factory order numbers on Friday.
Other stats in the week include preliminary November inflation and Eurozone unemployment and retail sales figures. From elsewhere, in Asia private sector PMIs numbers from China will also provide direction. Away from the calendar, COVID-19 vaccine news and stimulus talk from the world’s top economy will also influence.
On the monetary policy front in Australia, the central bank policy decision on Tuesday will also draw plenty of attention. While the markets are expected rates to be left unchanged, there could be the talk of further support via its bond-buying program.
Mixed day of trading for UAE bourses
While the index in Dubai declined at the start of the week, the bourse in Abu Dhabi edged up, as investors weighed macro vaccine-related developments against the number of new COVID-19 infections.
The Dubai Financial Market (DFM) dropped 0.82 per cent to 2,399 points, while the Abu Dhabi Securities Exchange (ADX) inched up 0.28 per cent to 4,985 points.
Most other Gulf stock markets too were mixed in early Sunday trading, having gained last week on optimism about COVID-19 vaccines. While Saudi Arabia’s index was up 0.3 per cent, the Qatari index was down 0.5 per cent.