Chinese stocks are the big losers of 2023. Oil also had a bad year

Chinese stocks are the big losers of 2023. Oil also had a bad year

Dec 29,2023
London CNN  — 

There was one conspicuous no-show at this year’s global stock market party: China.

While 2023 has been the best year for global stocks since before the pandemic, with markets in the United States, Europe and India reversing last year’s declines to enjoy strong rallies, investors have soured on China. A string of problems — including a real estate crisis, weak consumer spending and high youth unemployment — have put the world’s second biggest economy on the back foot.

China’s blue-chip CSI 300 index fell more than 11% this year, while Hong Kong’s Hang Seng is down almost 14%. Meanwhile, the MSCI World index is on track to close the year 22% higher, its biggest annual jump since 2019.

The US’s benchmark S&P 500 index, and Europe’s Stoxx 600 index, are on course to finish the year up almost 25% and 13% respectively. India’s benchmark Sensex index, which tracks 30 large companies, has climbed nearly 19% this year.

Stocks have bounced back thanks to falling inflation, raising investors’ hopes that the world’s central banks will soon cut interest rates, as well as excitement around the potential for artificial intelligence to make big returns for companies. India has gained from bullish bets on its economy.

Yet, despite abandoning its policy of strict coronavirus lockdowns in late 2022, China’s economy has not posted the strong rebound that many investors were hoping for.

Among a long list of challenges, sluggish demand has kept a lid on consumer prices for most of 2023, and there is a risk of a deflationary spiral. Foreign companies have also grown wary of Beijing’s rising scrutiny and are leaving the country.

The longer-term outlook isn’t rosy either.

In November, the International Monetary Fund (IMF) said it expected China’s growth rate to reach 5.4% in 2023, and gradually decline to 3.5% in 2028 as its economy grapples with problems ranging from weak productivity to an ageing population.

“The 2024 challenge for the Chinese economy will not be GDP growth — that will likely be above 4.5%,” said Derek Scissors, senior fellow at the American Enterprise Institute, a center-right think tank, told CNN this month. “The challenge will be that the only direction from there is down.”

Oil prices down

A struggling Chinese economy has helped drive steep declines in oil prices this year.

Brent, the global oil benchmark, is on track to decline almost 9% this year to trade at about $78 a barrel, while West Texas Intermediate crude, the US benchmark, is heading for a loss of more than 10% to around $72 a barrel.

As the world’s largest oil importer — 71% of the oil it consumes comes from foreign countries — signs of weakening demand in China have triggered sell-offs by investors. Record levels of oil production in the United States this year have also played a major role in driving those price declines.

The US Energy Information Administration expects crude oil output to have reached an all-time high of 12.9 million barrels a day on average this year, and to hit another record average of 13.1 million barrels a day in 2024.

Earlier this month, Goldman Sachs cut its forecast for the average oil price next year by 12%, citing abundant US production.

Prices have fallen despite the Organization of the Petroleum Exporting Countries and its allies — a group of the world’s major oil producers known as OPEC+ — saying they will extend a supply cut of 2.2 million barrels per day through the first quarter of next year in an effort to buoy prices.

Maybe You Like

Trump stock tanks after issuing tens of millions new shares

CNN — Trump Media & Technology Group’s stock is tumbling again after the company announced a massive new influx of shares. A new public stock offering of 21.5 million shares announced Monday would add more than 15% more stock...

Three ways investors can minimize their tax payments

New York CNN — It’s Tax Day in the United States. Some Americans are scrambling to get their documents in on time, while others are figuring out how to pay what they owe or enjoying a return of cash from the IRS. Either way,...

Dow tumbles more than 300 points on fears of potential attack by Iran and inflation woes

New York CNN — US stocks slid Friday morning as Wall Street worried about escalating tension in the Middle East and sticky inflation. The Dow fell 308 points, or 0.8%. The S&P 500 declined 0.8% and the Nasdaq Composite lost 1%....

Latest Added Hyip programs

BUSINESS-INVEST (businessinvest.spb.su)
Added: Apr 15,2024
(72)
CITY BUILD (citybuilder.top)
Added: Apr 15,2024
(96)
script.google.com (script.google.com)
Added: Apr 15,2024
(92)
AVTOSTART (avto-start.pw)
Added: Apr 15,2024
(24)
BEST-MINIONS (best-minions.top)
Added: Apr 15,2024
(148)
Zonders (zonders.life)
Added: Apr 15,2024
(35)
Valery Ai (valery-ai.com)
Added: Apr 15,2024
(91)
godziton (godziton.com)
Added: Apr 15,2024
(114)