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23.10.2020 02:22 PM
Stocks rise amid encouragement in stimulus package negotiations

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Asian stock exchanges mostly traded in the green zone on Friday. The good mood was transmitted from across the ocean. Thus, US and European stock exchanges also show strong growth.

The main positive point is related to the progress of the negotiation process on the adoption of new financial incentives in the US. The urgent issue seems to have moved forward, which means that its final solution is not far off. The same opinion is shared by House Speaker Nancy Pelosi, who said that an agreement is about to be reached. One thing is clear now: the parties are tired of being in a state of uncertainty and want to end this issue once and for all.

Japan's Nikkei 225 index was up 0.36% in the morning. Statistics for the country also remained without much negative. For example, the level of consumer prices for the first month of autumn did not change, which is already good against the background of the overall growth of this indicator in the world. The level of consumer prices, excluding fresh products, decreased by 0.3%, while the previous drop was 0.4%. Initial forecasts estimated an increase of 0.1% and 0.4%, respectively.

China's Shanghai Composite Index fell 0.33%. In contrast, the Hong Kong Hang Seng Index rose 0.5%.

South Korea's KOSPI Index rose 0.34%.

Australia's S&P/ASX 200 index showed a slight decline of 0.1%. At the same time, the PMI indicator in the country's services sector for the second month of autumn has already become larger and reached 53.8 points. Recall that its previous value was 50.8 points. It is noteworthy that the growth of the indicator is recorded for the second time in a row, which indicates a fairly rapid increase in activity in this area of the economy.

A steady rise was also observed in the major stock indexes of the European stock markets. The positive factor is also in light of the progress in the negotiation of the adoption of the stimulus package in the US. In addition, optimism is growing on the back of good quarterly reports from the banking sector and car manufacturing sector.

The general index of large enterprises in the European region Stoxx Europe 600 rose 0.8%, which allowed it to move to a new level of 363.17 points.

The UK FTSE 100 Index is up 1.17%. The German DAX index went up 0.94%. France's CAC 40 jumped 1.3%, making it the top gainer by morning. Italy's FTSE MIB Index rose 1.17%. Spain's IBEX 35 Index climbed 1.23%.

To date, the second wave of the coronavirus pandemic is the most negative constraint on growth. The spread of the disease is so rapid that the pressure on stock markets is also inevitably growing. The epidemiological situation is particularly serious in Europe. New restrictive measures may further undermine the region's economy, which has not recovered from the effects of the pandemic last spring.

Statistical data on changes in the region's economy is another confirmation of this. The composite PMI index of the European region has already fallen to the lowest levels in the last four months, and this, according to analysts, is far from its final reduction.

This month alone, the indicator has already reached the level of 49.4, which was previously at 50.4 points. Initial forecasts estimated a reduction to 49.3 which almost coincided with the real figures.

The PMI indicator in the services sector of the region also declined to 46.2 points, compared to the previous value of 48 points. It should be noted that the negative dynamics is recorded for the second time in a row, which becomes an indicator of the worsening crisis.

Meanwhile, the PMI index in the eurozone industrial sector, on the contrary, managed to rise from 53.7 points to 54.4 points. And this is its most significant growth over the past two years. Initial forecasts estimated a decrease in the indicator to 53.1 points.

Maria Shablon,
Analytical expert of InstaForex
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