The NASDAQ Composite Technology Index had its worst January in at least 10 years, falling 8.98% to 14,239.88 points, a similar loss to the 7.86% drop it made in January 2016 reported, followed by five years of profits.
Meanwhile, the Dow Jones Industrial Average stood at 35,131.86 points, with a loss of 3.32% in January and the S&P 500 fell 5.26% in the month to 4,515.55 units.
Among the companies that fell the most on the NASDAQ were AMD (-20.60%), followed by Novavax (-34.51%) and Netflix (-29.10%) in January.
The expectation of the beginning of the interest rate hike by the US Federal Reserve, geopolitical tensions and the correction of the stock market generated great volatility in January, which affected stock markets worldwide.
In Asia, the major stock indices showed large losses in January. South Korea’s Kospi fell 10.56%, the Shanghai index lost 7.65% and Japan’s Nikkei 225 fell 6.22%. Only Hong Kong’s Hang Seng won 1.73 percent.
In Europe, the losses were led by the German DAX with a decrease of 2.60%, the French CAC 40 lost 2.15% and the Ibex 35 from Spain had a decrease of 1.16%, while the FTSE 100 recovered and ended with an increase of 1.08 percent.
Latin America won
Latin American stock markets benefited from volatility and noticeable gains in the first month of 2022. The Colombian Stock Exchange (Colcap) rose 8.93% while the Argentine Merval rose 8.87%, and the Brazilian Bovespa rose 6.98 percent.
Gabriela Siller, director of economic analysis at Banco Base, explained that the Fed’s monetary policy, as well as the increase in cases of coronavirus infections worldwide, affected geopolitical tensions and the financial results of the quarterly reports at the end of 2021 markets in January .
“During the first part of the month, more restrictive remarks were highlighted by the members of the Fed, so the market started discounting a first increase in the interest rate from March. “Later, on January 26, after Jerome Powell’s conference, speculation increased about the possibility of more than four interest rate hikes this year,” he said.
“An increase in interest rates reduces the attractiveness of investing in riskier assets such as equities. In addition, the discount rate of the discounted flow is increased at current value, which reduces the valuations of the companies, ”the specialist recalls.
Corrections
According to the firm Black Wallstreet Capital, January began with major corrections for most of the world’s stock markets, and that is that risk factors increase aversion.
“The Fed’s position is confirmed as restrictive and the increase in rates will be present from the first quarter, while the decline in the balance sheet will take place in the second half of the year. Under this assumption, greater volatility is expected in the global financial markets, ”said Jacobo Rodríguez, director of economic analysis at BWC.
Reference-www.eleconomista.com.mx