SHARE PRICES AND MARKET ANALYSIS

A snapshot of bike and ATV industry share performance across key manufacturers and major global markets at the trading week closure on Friday 17 June 2022. BDN financial editor Roger Willis reports.

Even higher US inflation data, anticipated aggressive monetary tightening and the almost certain prospect of a sharp economic recession to follow engendered intermittent panic in New York. Equity trading sank into a bear market as the sell-off accelerated.

After the US Federal Reserve abruptly raised its base interest rate by 0.75% midweek, its biggest increase for three decades, investor sentiment got steadily worse and market indices continued to plunge for a third consecutive week. The blue-chip S&P 500 and Dow Jones Industrial Average respectively finished 5.8% and 4.8% down. S&P’s MidCap 400 took more severe punishment, diving by 7.6%.

Harley-Davidson was a typical prisoner of market misfortune, its share value plummeting by a vicious 5.3% on Monday. The price then rallied modestly, rebounding by 1.6% on Tuesday and 2.7% on Wednesday, as traders awaited central bank intervention. When that came, the sell-off resumed and Harley incurred a 6.2% loss on Thursday, teetering on the brink of descent into 20-buck territory. Friday’s merciful dose of dip-buying, worth 1.6%, pulled it back from the edge.

Outside the eurozone, Switzerland and the UK both followed the US Federal Reserve with base interest-rate increases, while the European Central Bank indecisively put off the inevitable. German investors in Europe’s largest industrial economy weren’t amused and the Xetra Dax index in Frankfurt retreated to close 4.6% lower. Milan’s Borsa Italiana MIB lost 3.4%. All four biker-related stocks were afflicted, Volkswagen and KTM parent Pierer taking the hardest knocks.

The Bank of Japan refused to compromise on its ultra-loose monetary policy stance, even though substantial evidence had emerged that the progressively weakening yen has now driven up factory input costs to an unacceptable level.

Tokyo investors expressed their unease with a sell-off, pushing the Nikkei 225 index down by a brutal 6.7%. Anong biker stocks, Suzuki got away with the least grief. But Yamaha and Kawasaki were pretty much aligned with market gloom.

Excessive input costs, led by energy, were the name of the game in India too. Mumbai’s BSE Sensex stock index fell for a second week on the trot. This time, motorcycle manufacturers weren’t immune, all of them suffering losses. Norton parent TVS got the lightest spanking.

Remarkably, Chinese equity markets stood out as the only major bastion of positivity in an otherwise troubled world. Shanghai’s all-share SSE Composite index rose by 1% and the CSI 300 covering blue-chip corporates across both the Shanghai and Shenzhen exchanges put on a stronger 1.7%. Seven of China’s eleven listed motorcycle producers made gains.