Last week in summary: SA40

It was a lackluster week on the markets with our local bourse closing more or less where it started over the period.

The economic calendar has been relatively light with Flash Manufacturing PMI data from China, Europe and the US being perhaps the most relevant.

Our market reacted negatively after the Chinese reading of the aforementioned data came in below expectations and alluded to further industry contraction. This raised demand concerns and catalyzed weakness in our resource counters.  The negative reaction followed the previous days renewed optimism after newswires reported that Chinese officials were committed to maintaining growth above 7% and anything below would not be tolerated. The German and French Manufacturing PMI figures came in ahead of consensus, boosting European indices but failing to offset the drag induced by China on our market.
 
In the US, data flow was mixed. Existing home sales and weekly jobless claims disappointed, while new home sales, manufacturing PMI data and durable goods orders impressed markets.At home, CPI figures indicated that Junes reported inflation at 5.5% was well within the 6% targeted threshold.
 
Although the All Share Index reflected weakness in our market this week, the marginal decline follows a month long rally in excess of 7% from the recent lows at the end of June. It is natural for a market to erase small portions of a significant rally and this week’s trading volume has been low, suggesting possible profit or a market erring on the side of caution as we near all-time highs.

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