Stock market around the world likely to see correction before year-end: Reuters poll
livemint.comequity market was either likely or very likely. The remaining 22 said unlikely or very unlikely. Of 15 stock indices polled on, analysts forecast only four to rise more than 5% by year-end.
The S&P 500 index, up nearly 15% already this year but down over 4% this month, was forecast to end the year at 4,496, about 2.2% above Monday's close of 4,399.77. Japan's Nikkei is predicted to outperform its major peers and is expected to rise nearly 8% from now. Europe's STOXX 600 and the blue-chip Euro STOXX 50 indices were expected to gain 1.3% and 0.6%.
Meanwhile, Indian equities have gained over 7% for the year, and were expected to rise only another 1.2%, as per the Reuters poll. Among other emerging economies, Brazil's Bovespa and Mexico's S&P/BMV IPC were forecast to rise around 13% and 7%, respectively. A rise in rates in money markets well above inflation have reduced appetite for equities, which during a long era of zero interest rates and low inflation were repeatedly described as the only game in town for investors, Reuters reported.
Moreover, the benchmark US Treasury yields have spiked to their highest levels since 2007 on rising bets that the interest rates will remain higher for a longer period of time even as the Federal Reserve is nearing the end of its hiking cycle. Also Read: Why are global bond yields rising and how is it impacting Indian stock market? “We do not see any upside from here into year-end... but we think there is a good chance that equity markets move meaningfully below our year-end projections in the interim," noted Marko Kolanovic, chief global market strategist at JP Morgan, Reuters reported.
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