Equities: Cyclical rotation extends as tech recovers – Danske Bank

Danske Research Team notes that global equities began August with fresh all-time highs in several MSCI indices. Gains were driven by sector rotation, with software rebounding 16% over the past week and lower Oil prices supporting sentiment. Defensive sectors lagged, while Asian equities traded lower on scepticism around regional tech and semiconductors despite firmer US and European futures.

Global indices hit highs on sector rotation

"Equities started August on a positive note with fresh all-time highs for several of the MSCI world indices."

"The move was driven by a strong sector rotation, combining further relief in software, which has now recovered 16% over the past week, with lower oil prices following more constructive rhetoric around Iran and the Strait of Hormuz."

"The cyclical rotation seen over the past three sessions therefore continued, while several defensive sectors lower despite the solid index gains."

"In Asia this morning, sentiment is somewhat weaker as scepticism around Asian tech and semiconductors weighs on regional markets."

"As a result, Asian equities trade lower even as both US and European futures move modestly higher."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)