Global Indices Monthly Outlook – November 2017

The global stock markets rushed ahead during the month of October as a bull run gripped the major stock markets around the world led higher by the US stock indices which made it a habit to keep making all time highs almost on a daily basis. This global run is something that we have been pointing out for the last couple of weeks in our daily forecasts and we believe that this is likely to continue in the short and medium term as well.

US Stock Indexes Breach All Time Highs

The US stock indices were led higher by the general steadiness in the dollar. Also, the market was led to believe that the Fed would be hiking rates in December and this made the dollar buoyant which in turn helped the markets to move higher. Also, the US was finally able to get some break from the threats from North Korea and this reduced the risks that dominated the markets in the previous months and the stock markets used this opportunity to move higher.

We also believe that the US stock markets are likely to continue to move higher in the coming month as well as the global bull run begins to take shape. The hike in the interest rates in the various major countries is likely to make them attractive for investments and it could lead to a flow of funds into the stock and bond markets in the hope of further returns and this will fuel the global rally. We would not be surprised if the US stock indices have an equally bullish month as they had in October.

European Stock Markets Freed from Pressure

The European stock markets spent a large part of October under the uncertainty that was brought in by the Brexit process, the question of QE tapering by the ECB and also the crisis in Catalonia. The Brexit process continued but with not much of progress in the talks and this brought a lot of pressure on the UK economy and hence on their stock markets as well. Also, there was the possibility that the ECB would taper the QE and fully complete it quickly and this belief also placed pressure on the stock markets which led the DAX to struggle to make any kind of a bullish move. Also, the Spanish stock markets were rocked by the crisis in Catalonia where a large part of the population were demanding for Independence from the mainland.

The European stock markets got some relief only towards the end of the month as the Catalonia crisis blew over and the ECB sought to extend the QE by a year atleast. This helped the stock indices to finally break higher. This bullish leg is likely to continue in the upcoming month of November as the DAX and the other stock indices play catch up with the rest of the global stock markets and join them in the bullish run that they are going through. This would mean that the month of November is likely to be more bullish than it was in October.

Asian Stock Indices Follow Suit

The Asian stock indices also followed the cue from the US stock indices during the month of October and moved higher during the course of the month. The Nikkei was also buoyed by the victory of Abe in the elections in Japan and the fact that he gained a large majority ensured the stability of the government which is usually loved by the markets. They showed their appreciation by pushing the Nikkei even higher during the course of the month. The Indian stock indices also gained during the course of the month and they closed the month pretty close to their all time highs.

As explained for the other stock markets, we believe that the bull run would continue in the Asian stock markets as well with the Indian stock indices challenging the all time highs in due course of time. We also expect the Nikkei to continue to move higher during the upcoming month.