Bearish territory indices grow on rising inflation

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March 15, 2022 (MLN): As risks pile up for global stock markets from rising inflation and tightening central bank policies to the economic fallout from Russia’s invasion of Ukraine, the list of indices that have fallen into bear market territory grows, a report from Bloomberg noted.

The tech-heavy Nasdaq 100 Index was the last major gauge to enter a bear market on Monday. It joins a host of other major stock indices around the world, from the Chinese CSI 300 to the German DAX, which have fallen 20% or more from recent highs this year, it added.

The report further said, “Of the major metrics classified as bear markets this year, the Euro Stoxx 50 and the DAX in Europe have since recouped both losses.”

Meanwhile, the MSCI Emerging Markets Index has lost more ground, while China’s CSI 300 continues to suffer a brutal sell-off amid risks including ongoing regulatory pressure, new Covid lockdowns and sanctions fears over China’s relationship with Russia.

Among other things to keep an eye on is Japan’s Nikkei, which is about to enter a bear market. The MSCI AC World Index, meanwhile, is down 13% from recent highs. That gauge has moved into bear market territory five times in the past 20 years, with the drop during the 2008 global financial crisis being by far the largest, it added.

The extreme volatility seen in the markets this year has also propelled the 52-week lows for individual stocks to the highest level since the Covid-19 pandemic first hit the markets in March 2020. And for Apple Inc., the world’s most valuable company, a 17% sell-off from its January high has brought it into bear territory.

As the bear market list grows, investors have sought new refuges across asset classes and countries. A survey of fund managers at the Bank of America Corp. in March, cash allocation among customers rose to its highest level since April 2020, while equity exposure fell to its lowest level in nearly two years.

Most investors in that survey now expect global equities to enter a bear market this year, as growth prospects have fallen to the lowest level since the 2008 financial crisis, the report highlights.

Copyright Mettis Link News

Posted on: 2022-03-16T00:22:19+05:00

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