Global market performance: Equities witnessed global selloff in September amid surging crude oil prices, US dollar. What's next?

Global markets ended the September month on a muted note amid persistent fears of higher US interest rates and concerns over China's beleaguered property market. The surging dollar index and crude prices have also increased the selling pressure on investors.

Global Equity Performance 

Last month, the majority of global equity markets experienced increased selling pressure. In the US, the Dow Jones index declined 3.5 per cent, while the tech-heavy Nasdaq index tanked 5.8 per cent during September.

While in Europe, on a monthly basis, the German equity index DAX was down 3.5 per cent, the French CAC 40 index plunged 2.5 per cent,  on the other hand, the British stock benchmark FTSE100 surged 2.7 per cent.

In Asia, the Japanese index Nikkei 225 dropped 2.3 per cent, the Straits Times index of Singapore slipped 0.5 per cent, and the Chinese stock market Shanghai Composite Index declined 0.3 per cent on the other hand, India’s Nifty 50 index jumped 2 per cent last month.

In Currency markets US Dollar index surged 1.86 per cent to 106.17 level. Indian Rupee depreciate 0.4 per cent against the US Dollar to Rs 83.030 per dollar level. While the European currency Euro has declined 2.5 per cent against the US dollar.

In the commodities segment, Brent crude oil futures surged 6.18 per cent in September at USD 92.2 per barrel level. In the International market, Gold futures have declined 4.09 per cent, While Silver prices have tanked 8.26 per cent on a monthly basis.

Foreign investment trends

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said "September has witnessed a clear trend reversal. After sustained buying in the previous three months, FPIs have turned into sustained sellers in September having sold stocks for Rs 26689 crores in the cash market”. This sustained selling has been in response to steady dollar appreciation which took the dollar index close to 107 and the steady rise in the US bond yields which took the US 10-year bond yield to around 4.7 per cent. The spike in the Brent crude to $97 also weighed on FPI selling.

 However, last Friday (September 29) witnessed a marginal decline in the dollar index, US bond yields, and Brent crude. This has emboldened the DIIs to buy aggressively thereby imparting resilience to the market. In September, total FPI selling of Rs 26689 crores was countered with total DII buying of Rs 19310 crores. Even while selling FPIs were buyers in capital goods and selected financials." Vijayakumar said.

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