Roll No 32033

Subject name: International Financial Management

Special Assignment
Topic: Present situation of International stock market &
bullion market.

Submitted By:
Sruthi A
Roll No 32033
Submitted To:
Madam B Sravani
Assistant Professor

Marks Obtained:
Faculty Signature:
THE INTERNATIONAL STOCK MARKET
The international stock market refers to all the international markets
that negotiate stocks from their domestic companies. 

For example, we can buy stocks from Apple at the local American
market, but to get stocks from the Japanese Sapporo, we need to go
the international (Japanese) market. Most countries have their own
stock exchange.

The indexes track the fluctuations in the value of stocks of one

market. Some of the most important indexes are the Dow Jones,
NYSE and NASDAQ operating in New York, the Nikkei 225 in
Tokyo, the DAX in Frankfurt, and the FTSE in London, the SENSEX
and NIFTY in India, Shanghai SEX in China etc.

ANALYSIS OF MARKETS OVER JANUARY 2020

After a stellar 2019, risk markets began the new decade in a good
mood, before volatility picked up towards the end of the month.
Concerns over the coronavirus outbreak checked the stock market
optimism that followed the signing of a phase one trade deal between
the US and China. Markets were less perturbed by the brief flare-up in
tensions between the US and Iran, which de-escalated swiftly.

Economic data across regions continued to show signs of

improvement and, with major central banks set to remain
accommodative in the coming year, near-term recession fears appear
to be subsiding.

The US dollar and Japanese yen both appreciated and government

bonds outperformed equity markets – US Treasuries and euro
government bonds returned 2.4% and 2.5% respectively. In a month
where equities were down, the S&P 500 continued its leadership of
major stock markets and was flat over the month. Emerging market
equities were most affected by the coronavirus outbreak and fell
4.7%.
 World Stock Market Returns

USA (United States of America)

The signing of a phase one trade deal between the US and China on
15 January was welcome news, representing a thawing in tensions,
but it
is important to remember that significant tariffs will remain in place
and that the structural issues to be tackled in the next phase are not
likely to be resolved easily. The agreement means the US will
suspend its next planned round of tariffs, as well as cutting the
existing tariff rates on around USD 110 billion of Chinese imports
from 15% to 7.5%. In exchange, China has committed to boost its
imports from the US by around USD 200 billion over the next two
years; allow greater access to its markets for financial services
companies; enforce intellectual property protections; and be more
transparent in its currency management practices.

The US earnings season for the fourth quarter of last year is well
underway, with companies so far doing better than expected. Earnings
per share and sales are grown at 6% and 2% year on year, respectively
for the S&P 500.

UK (United Kingdom)

The UK officially exited the EU on 31 January 2020. But those

hoping that this marks the curtain call for this long Brexit
performance will surely be left disappointed. The UK and EU will
now need to negotiate a new free trade agreement during the 11
months of transition. As a result, talk and risk of a hard Brexit will
persist to some degree, and may intensify by mid-year.

Economic data deteriorated notably ahead of the December election,

but there has been some rebound in the subsequent data. Employment
grew by 208,000 in the three months to November. The flash
purchasing managers’ index releases for January, the first major data
points since the election, pointed to a sharp improvement in both
manufacturing and services, with the composite rising from 49.3 to
52.4.

ASIA

Asian share markets were fighting to stabilise at the end of a

punishing week as investors clutched at hopes China could contain
the coronavirus, even as headlines spoke of more cases and more
deaths.
Supporting sentiment were surveys showing Chinese manufacturing
activity held steady in January while services actually firmed, though
this was likely before the virus took full hold.

Indeed, reports some Chinese provinces were asking companies not to

re-start until Feb. 10 suggested activity would take a hard knock this
month.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up
0.4%, but was still down 3.8% on the week so far. Its 2.3% dive on
Thursday had been the sharpest one-day loss in six months.

Japan's Nikkei bounced 1.8%, recouping half of its weekly loss. E-

Mini futures for the S&P 500 firmed 0.2%, having rebounded late
Thursday to end up 0.5%.
ANALYSIS OF MARKETS OVER FEBRUARY 2020

The coronavirus (COVID-19) outbreak replaced trade as the main

focus for the markets. Fears of near-term negative effects on Chinese
and global growth. In the first couple of weeks of February, equity
markets shrugged off concerns about the outbreak. However, the
increase in cases outside China led to a sharp selloff towards the end
of the month. Developed market equities fell sharply, From a regional
perspective, emerging market equities outperformed developed
markets, despite the fact that most COVID-19 infections are currently
in Asia, as investors factored in declining rates of new infection in
China compared with increasing infections outside China. Risk
aversion also spread into commodities. The WTI oil price fell 13%,
adding to the steep fall in January and bringing the total year-to-date
decline to 27%. The biggest headwinds came from concerns about the
first decline in global oil demand since 2009, due to the economic
disruptions caused by the COVID-19 outbreak, together with stalling
negotiations between Russia and OPEC on the implementation of
further supply cuts. An oil price below USD 50 is sending a
disinflationary impulse into the world economy, giving central banks
room for supportive measures.
World Stock Market Returns
ASIA

The virus outbreak represents a large shock to the Chinese economy.

To reduce the spread of infection, the authorities in China
implemented significant restrictions on travel and production. High
frequency indicators such as daily coal consumption give some
indication of the current level of activity. With COVID-19 expected
to hit Japan’s inbound tourism and trade in Q1, the risks for the
Japanese economy have risen.
In Korea, the country with the most confirmed COVID-19 cases
outside China, consumer confidence fell from 104.2 in January to
96.9 in February – the largest single month decline since June
2015.The close economic relationship between Korea and China also
weighed on the economic outlook.

USA (United States of America)

Developed market equities fell sharply, with the S&P 500 ending the
month down 8.2%. While recent hard macro data indicates that the
US economy remains healthy, the survey data suggested downside
risks to growth if COVID-19 can’t be contained. This makes further
monetary stimulus by the Federal Reserve more likely in the coming
months. 

EUROZONE

The euro area already showed a significant impact from the

coronavirus outbreak, with sharp declines and this virus-related drags
are likely to intensify further in March as the COVID-19 outbreak in
Italy and around the world disrupts production. The globally
integrated European economy is particularly vulnerable to global
supply chain disruptions, posing downside risks to growth. If the
situation deteriorates further in the coming months, fiscal measures
can be expected. Even Germany is allowed to breach its constitutional
spending limits in the event of a crisis.

PRESENT ANALYSIS OF STOCK MARKET

As Corona virus (COVID-19) emerged and declared as pandemic

entirely in the world stocks started underperforming and since 2008
the major stock indices has seen their worst performance like Dow
jones, NASDAQ, NIFTY, Sensex in their recent times and also
market got halted for some time and reopened to perform well to give
good returns to the investors. As due to this pandemic we can say that
the world had gone back to 10 years in which IMF declared as global
recession emerged and to cope up this we need to wait till 2021.

BULLION MARKET

A bullion market is a market through which buyers and sellers

trade gold and silver as well as associated derivatives. The London
Bullion Market is known as the primary global bullion market trading
platform for gold and silver.

Bullion markets exist in New York, Zurich, and Tokyo, with London
serving as the location for the largest global bullion market. Bullion
market trading is known to have a high turnover rate with transactions
conducted electronically or by phone.

ANALYSIS FROM JANUARY 2020 – PRESENT

The interplay between market risk and economic growth had driven
gold demand in 2020 focusing on:
 Financial uncertainty and lower interest rates
 Weakening in global economic growth
 Gold price volatility.
GOLD PRICES slipped on Monday (30-03-2020) after showing the
strongest weekly gain since 2008, made as the worsening coronavirus
pandemic saw Comex speculators cut their bearish bets against the
metal at the fastest pace on record while the giant gold-backed GLD
trust fund saw its heaviest investor inflows since the global financial
crisis' stock-market lows of 10 years ago.

The average spot gold price quoted by London bullion banks slipped
0.7% to $1618 per ounce Monday lunchtime, trimming last week's
better than 8% surge. US gold futures on the CME's Comex meantime
fell to $1642 per ounce for April settlement, cutting the derivative
contract's differential with spot prices to $24 per ounce from last
week's spike to $100.

India, gold's No.2 consumer nation on Monday (30-03-2020) saw

domestic gold prices (Rupees 43,501 per 10 gram) jump to the highest
premium over London in 6 months, reversing what had been near-
record discounts amid weak consumer demand, as the PM Narendra
Modi administrations 21-day lockdown shut bullion trading.
 
Gold futures on Thursday (26-03-2020) fell 1.39 per cent to Rupees
41,630 per 10 gram as participants offloaded their holdings on weak
spot demand. Market analysts said the fall in gold futures was mostly
in tune with weak spot demand. Globally, gold was trading 0.76 per
cent higher at $1621.80 per ounce in New York.
Silver futures on Thursday (26-03-2020) plunged Rupees 842 to
Rupees 40,864 per kg as participants cut down their bets taking weak
cues from overseas to markets. In the international market, silver
prices traded 2.14 per cent lower at $14.56 an ounce in New York.
Analysts said weak trend overseas mainly kept pressure on silver
prices here.