For the latest ETF industry news, please refer to our “Asia ETF Roundup (Industry) – October 2020”.
Major Markets Performance
Investors have their eyes on the U.S. President Election. Meanwhile, news on COVID-19 reoccupied a lot of the month’s front pages. In particular, the U.S. and many parts of Europe posted highs on new cases, prompting the re-establishment of restrictions in some European countries. Global markets had a good first half in October before reversing course. The Morningstar Global Markets Index and the Morningstar US Market Index were down 2.2% respectively in October. By contrast, Chinese equity markets performed strongly (proxied by the Morningstar China Index in USD), posting a 5.6% gain for the month. This was driven mainly by the strong performance by some heavy-weight stocks reaching new highs, such as Alibaba (09988, +6.4%) and Tencent (00700, +15.5%). Performance of the emerging markets was mixed, with Indonesian equities recording a gain of 9.0% while Russian equities suffered a loss of 8.0% (proxied by their respective Morningstar indexes in US-dollar terms).
The U.S dollar was little changed in October (the ICE Spot Index was up 0.2%). Asian currencies generally appreciated against the U.S. dollar. The Chinese Yuan appreciated strongly against the U.S. dollar by 1.7%, putting its year-to-date gain at 4.0%. Precious metals saw some small losses. The price of gold, silver and platinum fell 0.3-3.6%.
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Economic and Market News
China Economic Data: Q3 GDP Grew 4.9%; Inflation at 1.7% in September; Caixin/Markit PMI expanded further; Official PMI stable
- China posted third-quarter GDP growth of 4.9% year-on-year. This was up from 3.2% year-on-year in the second-quarter and propelled the accumulated growth rate for the first three quarters of 2020 to positive territory at 0.7%.
- Inflation dropped to 1.7% in September from 2.4% in August, driven by a moderation in food price gains.
- China's Caixin/Markit PMI remained strong in October, registering at 53.6 to signal further expansion from September's reading of 53.0. By contrast, the official PMI in October came in at 51.4, just a notch lower form September's 51.5.
