In The Middle East, The Global Stock Market Has Been Downplayed Collectively And Investors Have Not Been Panic.

Contributing author Julia Hongkong Report

The tension in the Middle East continued to escalate, and the global stock market ushered in the first "black swan" at the time of bidding farewell to the old.

According to Xinhua news agency, in January 8th, Al Asad, a joint air force base in Iraq, was attacked by several rockets in the western part of Iraq. Xinhua quoted Iran's semi official media as saying that Iran has launched a second round of strikes against US bases in Iraq. If the United States responds to the missile attack in Iran, it will launch an attack in the United States.

This makes the global stock market collectively fall into a sell-off state, and investors' risk aversion is increasing rapidly. Although the latest economic data released are better than market expectations, the three major indexes of the US stock market will still be callback in January 7th. On the 8 day, the stock index futures opened sharply, and the Dow Jones Industrial Average Index Futures dropped more than 350 points.

Past experience shows that geopolitical crises usually bring short-term shocks to risky assets such as stock market, but this effect usually does not last too long. At present, we see that investors have not panic, although the stock market has a certain callback, this is a typical hedge strategy. I think the overall response of the market is more rational, but the Middle East situation will not cause a recession in the US economy for the time being. In January 8th, Morgan Wu Anlan, director of Asia investment strategy at JP chase private bank, told Alex in an interview with the twenty-first Century economic report in January 8th.

Mark Haefeler, global chief investment officer of wealth management at UBS, said: "based on our benchmark scenario, there will be no escalation of major military operations, which should have little impact on the global economy and corporate profits. Therefore, we maintain the position of increasing global stocks and US stocks. "

Asian stock markets fell across the board

In January 8th, when the Asian market opened, the Hang Seng index opened 322 points to 27999 points, and fell to the 28000 mark. The intraday drop was extended to about 400 points, and the Hang Seng Index finally closed at 28087 points, with a 0.83% callback. Blue chips almost fell across the board. China Life (02628.HK) fell 2.5%, and the total daily turnover was 96 billion 554 million Hong Kong dollars.

"Over the past 10 years, investors have experienced numerous political and economic crises, and the stock market has been ups and downs. If there was a similar crisis, the stock market in Hongkong may have fallen by more than 1000 points, but after the opening today, the decline in the Hang Seng index began to narrow, which proves that investors are still more calm and choose to wait and see. Guo Jiayao, chief strategist at Yin Sheng wealth management in China, told the economic news reporters in twenty-first Century.

As of January 8th, Japan's Nikkei 225 index fell 1.57%, at 23204.76 points. South Korea's KOSPI index closed at 2151.33 points, dropping 1.11%. Meanwhile, the India Mumbai SENSEX index was down 0.11%, closing at 40825.79 points. The New Zealand NZX50 index fell 0.63%, to 11556.98 points.

On the same day, the Shanghai Composite Index closed at 3066.89 points, down 1.22%. The Shenzhen stock index and Shanghai and Shenzhen 300 index decreased by 1.13% and 1.15% respectively.

The conflict between the US and Iraq may exacerbate the market's worries and lead to turbulence in the capital market. The impact on the A share market is not direct. The A share trend is mainly affected by the domestic economy and policy, and is not strongly related to the trend of the international capital market. At present, the valuation of the A share market is relatively low and has become a depression in the global capital market. In the global market turmoil, it can attract more foreign capital inflow, and has entered the independent market since the beginning of the year. Yang Delong, chief economist of Qianhai open source fund, told reporters on twenty-first Century economic report.

Guo Jiayao believes that the current mainstream market opinion still believes that the possibility of large-scale regional wars in the Middle East is relatively low. "Under such circumstances, investors should not rush to sell goods and reduce their holdings. We suggest that investors should appropriately increase some defensive stocks and small stocks affected by the economic cycle, so as to enhance the overall portfolio's risk defense capability."

Last year, the Hang Seng Index performed poorly, or only about 9%, lagging behind most of the world's market. "Nearly half of Hsi's constituent stocks are financial stocks, especially mainland bank shares, which will inevitably drag down the performance of the overall index. HSI plans to announce the adjustment of Hengseng stocks in May, which is expected to bring second listed shares and different shares of the same stock into constituent stocks, which will bring structural changes to the Hang Seng Index, thereby bringing new impetus to the Hang Seng Index.

Guan Yongsheng, chief executive of Hengzhi company, told the media on 6 January that it would conduct market consultation in the past one or two weeks for the same stocks, whether the Quan Jidi two listed shares should be included in the Hang Seng Index and the state-owned enterprise index. It is expected to announce the results in the 5 quarter inspection. The Hang Seng index is reviewed quarterly, usually quarterly in May, and the quarterly inspection results will take effect in June. This means that the US stock market review, Alibaba, millet and other stocks are expected to be formally incorporated into the Hang Seng stock market in the year, that is, the so-called blue chips.

European stock markets generally fell on the 8 day of opening, while the pan European index Stoxx 50 reported 3741.76 points, down 0.47%. As of press time, the FTSE 100 index fell 0.5% at 7536.6, Germany's DAX index was 0.64%, and 13142.48 points; the French CAC 40 index was 5984.57 points, down 0.46%; Spain's IBEX 35 index was 9536 points, slipped 0.46%.

Are stocks no longer in sight?

The global stock market just ended in 2019 was a song and dance. Among them, US stocks are the best annual performance since 2013, and the S & P 500 index has gained nearly 29% annually, making us the top priority in the global market.

Simona Gambarini, a macro economist at Kay investment, believes that the short-term response of the US market to the Middle East crisis seems to imply that "the US economy will remain intact. Even though the US stock market is still strong, we do not think that the US stock will reappear in 2019."

Obviously, US stocks are unlikely to reproduce such amazing gains. Gambarini admitted that once the oil price surge caused by the supply, the outbreak of a full-scale war between the United States and Iran will drag down the global GDP growth by 0.5%. "The US itself, as a big oil producing country, has less dependence on imported oil, so the economic impact will be smaller than that of the first Gulf War."

In fact, Wall Street analysts recently surveyed by CNBC generally predict that the S & P 500 index will reach about 3300 points by the end of the year. Francois Trahan, the head of UBS's US stock market strategy, believes that the US stock market will roll out the roller coaster market this year. "As the manufacturing index ISM continues to bottom and the market's profit level is expected to continue to decline, the S & P 500 index will probably fall to a maximum of 16% by May. However, with the positive impact of low interest rates on the economy gradually emerging, the US stocks will rebound in the second half of the year."

In the fourth quarter of 2019, earnings of US stocks are expected to continue to slide, or 0.6%. However, according to Refinitiv's forecast, the earnings of the S & P 500 index is expected to rebound in the first quarter of this year, up 6.2% over the same period last year.

"In the long run, the returns of the stock market still depend on these basic factors, such as the economic cycle, monetary and fiscal policies. We are still optimistic about the global stock market, including the US, China and other markets, but because the global market growth is too high last year, the US shares may increase in the number of units in the middle and high this year, and the motive force behind them is mainly from the improvement of corporate profits. Wu Anlan said.

In addition, he believes that because of the escalating situation in the Middle East, investors' interest in investment in emerging markets may also be affected. "Continued inflow of funds may be suspended. Investors need to reassess the impact of this crisis on different emerging economies. For example, some oil dependent countries such as India, South Korea and Turkey have higher pressure on the economies of these countries," he said. He said.

According to statistics from the Institute of International Finance, in December last year, the stock market of global emerging markets had a total inflow of 12 billion 900 million US dollars, of which China's stock market was inflow of US $10 billion 100 million. The emerging market bond market recorded a US $17 billion 800 million inflow in the same period.