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U.S. stocks closed higher on Friday, driven by a softer-than-expected inflation report for February. The Nasdaq Composite ended March with its largest quarterly gain since 2020, indicating that the tech-heavy index has been recovering from its recent slump.
For the week, the Dow Jones Industrial Average gained 3.2%, while the S&P 500 and the Nasdaq Composite rose 3.5% and 3.4%, respectively.
This marks the best week for the Dow and S&P 500 since November, according to Dow Jones Market Data. For the month, the Dow rose 1.9%, the S&P 500 increased 3.5%, and the Nasdaq surged 6.7%.
In the first quarter of 2023, the S&P 500 rose by 7%, while the Dow Jones Industrial Average edged up by 0.4%. Meanwhile, the Nasdaq Composite soared by 16.8%, marking its largest quarterly percentage rise since the second quarter of 2020.
The personal-consumption-expenditures (PCE) price index increased by 0.3% in February, with inflation slowing down to 5% year over year from 5.3% in January. Core PCE, the Federal Reserve’s preferred inflation gauge that excludes energy and food prices, rose 0.3% last month for a year-over-year rate of 4.6%.
This figure is slightly lower than economists’ forecasts and is softer than the 4.7% increase seen over the 12 months through January.
Consumer spending in the U.S. edged up by 0.2% in February, while personal incomes rose by 0.3%, according to a report by the Bureau of Economic Analysis.
However, U.S. consumer sentiment fell for the first time in four months in February due to concerns about an impending recession, although the impact of the recent banking crisis was muted.
In addition, investors seeking yield in cash-like investments poured $66 billion into money-market funds last week, bringing total assets to a record $5.2 trillion, according to the Investment Company Institute.
Moving to Asia, India‘s production of eight infrastructure sectors recorded an almost flat growth rate of 6% in February compared to 5.9% in the same month last year, according to official data released on Friday.
This marks the lowest growth in the past three months, with the output of core sectors increasing by 8.9% in January 2023 and 7% in December 2022.
The growth rate of eight infrastructure sectors – coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity – stood at 7.8% in April-February this fiscal year compared to 11.1% during the same period last year.
Furthermore, India’s current account deficit (CAD) dropped sharply to $18.2 billion in the October-December period, according to data released on March 31 by the Reserve Bank of India (RBI).
This figure is much lower than the revised CAD figure of $30.9 billion recorded in July-September, with the provisional estimate of $36.4 billion for July-September’s CAD being revised downwards significantly due to downward adjustment in Customs data, the RBI said.
Meanwhile, the Indian government’s fiscal deficit for the first 11 months of 2022-23 widened to Rs 14.54 lakh crore, accounting for 82.8% of the full-year target for 2022-23.
Finally, China’s factory activity growth stalled in March, weighed down by slowing production and weaker global demand, adding to uncertainty about a post-COVID recovery.