Equity markets across the world were plagued by a series of events this past week, including the protest in Hong Kong, slowing economic growth in Europe and the pandemic threat from the Ebola virus. Last Thursday, Asian equity indices saw a rebound after minutes from the Federal Open Market Committee (FOMC) meeting in September hinted that the Federal Reserve may keep interest rates at the current ‘near zero’ level for a considerable period of time. However, markets extended their decline on Friday following the steepest sell-off in six months.
 
This morning, let’s take a moment to look at the performance of regional equity indices.
 
HSI ended with little changes for the week
 
The HSI rebounded more than 2% in the first four trading days of last week, as tension in its “Occupy Central” demonstration eased temporarily after the government indicated their decision to negotiate with the protest leaders. However, the rebound was short lived after the government pulled out of talks with the protestors when the city’s chief executive was accused of receiving multimillion payments from an Australian company. The 2% tumble seen in the US market on Thursday night also added pressure to the performance of the HSI, sending the HK benchmark 1.9% lower on Friday.
 
For the week, the HSI gained 0.1%. Its closing price of 23,088 on Friday meant that the benchmark index is currently trading 5.5% below its 50-day moving average.
 
This week, HSI traders will be looking out for the China Consumer Price Index (CPI) figure which may determine market’s direction for the coming week. The CPI measures the change in price for a basket of goods in an economy and is generally referred to as a gauge of inflation. According to Bloomberg’s survey of 42 economists, the China’s CPI is estimated to gain 1.7% year-on-year.
 
Nikkei at its lowest in two months
 
Last week, the Nikkei declined sharply to end at its lowest in more than two months, following the sell-off in the US market. Slowing global economic growth continues to be the main cause of the Nikkei’s decline, according to a report on Bloomberg. In addition, the report also mentioned about the strengthening yen adding pressure to the performance of its benchmark index. The Bank of Japan has kept its asset purchase program unchanged in its policy announcement on 7 October.
 
Closing at 15,300 last Friday, the Nikkei is currently trading 2.2% below its 50-day moving average, suggesting short term weakness in its price.
 
The Nikkei will be closed today for a public holiday.
 
STI held at 200-day moving average
 
The local equity gauge ended the week approximately 0.9% lower after swinging within a 1% range in the past five trading sessions. The strong rebound seen last Thursday did not manage to send the index into the positive territory for the week, after a steep decline in the US market. The STI pulled back 1.1% on Friday, with the local banks being among the top five laggards of the index constituents. The STI ended the week at 3,223.87, in line with its 200-day moving average.