On Monday, Indian equity benchmarks surged, snapping a two-session losing streak as global stocks attempted to recover from two weeks of losses on festive cheer, despite concerns that continued policy tightening would trigger an economic recession and harm companies’ profits.
After a shaky start in Asian markets, hopes of a demand recovery in China helped boost sentiment into the final trading week of 2022.
The BSE Sensex gained 468.38 points, or 0.76 percent, to end at 61,806.19, while the NSE Nifty gained 151.45 points, or 0.83 percent, to end at 18,420.45.
On Friday, both benchmarks fell for the second straight session, driven by fears of a global recession in response to hawkish remarks from major central banks.
The euphoria sparked by last week’s weaker-than-expected US inflation figures has subsided, with central banks stating unequivocally that they have no intention of ending their cycles of tightening monetary policy.
Futures for the S&P 500 and the tech-heavy Nasdaq 100 in the United States indicated a higher open, though both indexes are on track to end the month lower after rising in October and November.
The Stoxx 600 index in Europe opened 0.5% higher. A benchmark for Asian equities has begun to fall for the third day in a row, the longest losing streak in nearly two months.
Last week’s data heightened recession fears after business surveys revealed a drop in activity in Europe, Japan, and the United States.
Softening economic data as we approach the end of the year doesn’t help the mood, and markets are left wondering where to look for the upbeat feeling that has boosted US equities in the final two weeks of December 11 times in the last 15 years.
Stocks on Wall Street fell on Friday as weak economic data fueled recession fears. The S&P 500 index fell 2%. It has failed multiple times to trade consistently above its 200-day moving average and is down 20% for the year.
“The Santa rally normally kicks in around mid-December on the back of festive cheer and new year optimism, the investment of any bonuses, low volumes and no capital raisings at this time of year,” Shane Oliver, strategist at AMP Capital, told Reuters.
