Market Developments
US equities retreated in the week as a sharp rotation out of AI and semiconductor stocks outweighed supportive macroeconomic data. The S&P 500 fell 1.6% and the Nasdaq declined 4.1%, led by weakness in Information Technology, while Financials and Healthcare outperformed. Although June CPI fell 0.4% month-on-month, reducing expectations of a July Fed rate hike, investor sentiment was dominated by profit-taking in semiconductor stocks and IBM’s sharp decline following weaker guidance.
The global technology selloff also weighed on Asia, with Japan’s Nikkei dropping 6.4% and Chinese mainland equities falling over 5%, while Hong Kong ended the week higher at 1.6%. WTI Oil prices surged over 15% to above $82/bbl as renewed US-Iran tensions and Houthi attacks on Saudi Arabia heightened concerns over disruptions in the Strait of Hormuz and the Red Sea.
GCC markets remained sensitive to geopolitical developments, with July performance turning negative across most regional indices as Middle East tensions resurfaced. Since the conflict began in late February, Saudi Arabia and Oman have been relatively resilient, while Dubai and the broader MSCI GCC Index remain in negative territory. India SENSEX performed 0.8% for the week, supported by a 4.3% gain in the Nifty IT index following strong TCS earnings. Meanwhile, the UK confirmed Andy Burnham as Labour leader, with his appointment as Prime Minister expected on Monday.
