Last week was a mirror image of the previous one, at least as far as equities were concerned.
Global equities were down around 1.8% in both local currency and sterling terms, reversing their gains of around 2% the previous week
Emerging markets led the decline with a drop of 4.2%, just as they led the previous week’s increases with a 5.6% rise, while the US was once again middle of the pack, falling 1.5%. As for the UK, it was the only market to show an increase of 1.2%, having been – you guessed it – the only market to fall the week before. The tech sector was once again the main driver of this divergence in regional performance, falling 5.7% and more than reversing its 4% gain the previous week.
The volatility of tech highlights the frothiness in some areas – notably anything chip-related – following the strong gains of late. How long can the bonanza last? There was no particular news to knock the chip sector down as much as 7% over the week – in fact quite the reverse with another set of stellar results from US chipmaker Micron.