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Published: Feb 28, 2023
Updated: Feb 28, 2023

Global Markets Under Pressure Amid Inflation Concerns and Chinese Sell-off

Global Markets Face Turbulent Week Amid Inflation and Sell-Off Concerns

Global markets are bracing for a turbulent week as investors worry over rising inflation and Chinese stocks listed in the US take a hit. Asian indices are pointing to a weak opening following heavy selling in US markets. On Friday, the Dow closed 337 points lower, while the S&P500 and Nasdaq dropped 1% and 1.7%, respectively.

Inflation Fears Heighten as Core PCE Rate Surpasses Expectations

Chinese stocks in the US have been particularly hard hit, with the Nasdaq Golden Dragon index falling 3.9%. Investors are concerned about further rate hikes by the US Federal Reserve following another stronger-than-expected Personal Consumption Expenditures (PCE) inflation report. Over the week, the Dow has fallen by 3%, the S&P 500 by 2.7%, and the Nasdaq by 3.3%.

Inflation concerns are mounting as the PCE index increased by 0.6% in January, and 5.4% over the year. The core PCE inflation rate, which excludes food and energy, rose more than expected, jumping by 0.6% in January, surpassing estimates of 0.4%. The annual core PCE rate also surpassed forecasts of 4.3% by reaching 4.7%, up from 4.6%.

GDP Numbers for Major Economies to be Released in Coming Week

Looking ahead, GDP numbers for India, Australia, Canada, Brazil, Turkey, and Switzerland will be released. India's GDP is expected to grow by 4.6% in the October-December 2022 quarter, well below the 6.3% MoM rate.

Investors Must Remain Vigilant Amid Global Economic Uncertainty

The global market is under pressure as inflation concerns and Chinese sell-offs weigh heavily on investors' minds. The coming week's GDP numbers from major economies will also be closely watched. With the uncertain global economic outlook, it is important for investors to remain vigilant and diversified in their portfolios to mitigate risks.