S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
Danske Research Team notes global equities extended gains, pushing MSCI World above pre-war levels on the back of strong earnings revisions. Growth and cyclical stocks outperformed value and defensives, with small caps also participating. The bank highlights that Europe and Nordic markets benefited more from the peace trade due to their greater exposure to Iran-driven energy prices.
Rally broadens with strong peace trade
“The equity rally continued Tuesday, with most indices up about 1%. This takes MSCI World above the pre-war levels, although valuation is significantly lower due to large positive earnings revisions that have taken place since.”
“Growth stocks and cyclicals outperformed meaningfully yesterday. Global growth stocks beat value by more than 1pp, cyclicals beat defensives by roughly the same. This takes growth stocks 3pp ahead of value stocks over the last seven days.”
“Normally, US would outperform European and Nordic markets in this setup – and it did, somewhat – but what is different this time around is that Europe is more exposed to Iran through energy prices. Hence, the peace trade is stronger in Europe and Nordics, which offset the cyclical growth stock preference.”
“Normally, global large caps would also outperform small caps in this setup due to the US tech giants. However, small caps held up well in the rally yesterday, with Russell 2000 even ahead of S&P 500 and Nordic small caps meaningfully as well. US and European futures are little changed this morning.”
