SHARE PRICES AND MARKET ANALYSIS

A snapshot of motorcycle and ATV industry share performance across key manufacturers and major global markets at the trading week closure on Friday 25 August 2023. BDN financial editor Roger Willis reports.

USA — SAME OLD SUBJECT

Intermittent renewal of the now yawn-inducing debate on US Federal Reserve interest rate policy — set against repeated tranches of weak economic data — kept Wall Street market indices going up and down like the proverbial stripper’s knickers on a daily basis.

Their weekly conclusion saw S&P’s MidCap 400 close dead flat. Prominent MidCap powersports members Harley-Davidson and Polaris Industries continued on their consistent losing streak, though, which has lasted for more than a month. However, the blue-chip S&P 500 and Dow Jones Industrial Average couldn’t agree after five sessions. The former accumulated 0.8% positivity while the latter sank by 0.4%.

Light relief was provided by a blowout Q2 earnings report after hours on Thursday from giant US chipmaker Nvidia, which posted record quarterly revenue of $13.5bn, way ahead of forecasts, and profit five times higher year-on-year, almost 30% above analyst estimates. That really lit the tech sector’s fire and the tech-heavy NASDAQ Composite index suddenly soared to finish on a 2.3% gain.

EUROPE — HEADWINDS GET STRONGER

Reports of weakening business activity in both the UK and eurozone, approaching recessionary conditions, persuaded European stock traders into betting that slowing economies would force central banks to cap further interest rate rises. As a result, market indices recovered modestly from the previous week’s losses.

But heightened German economic grief ensured Frankfurt’s Xetra Dax only managed a 0.4% resurgence. And neither BMW nor Volkswagen Group were beneficiaries. The Wiener Börse ATX in Austria continued to decline, losing a further 0.6%, although local investors in KTM parent Pierer Mobility ignored any gloom. So, apparently, did the Italians, as the FTSE MIB in Milan added a useful 1.6%.

After bucking the previous week’s downbeat trend, Piaggio’s value increased again, despite news that its veteran chairman, chief executive and controlling shareholder Roberto Colaninno had died, leaving the business he had always ruled with a rod of iron lacking an obvious heir.

JAPAN — NORMALITY RESUMES

Japanese sentiment reverted to a more-or-less even keel and Tokyo’s Nikkei 225 stock index recovered some ground, rising by 0.7%. Motorcycle manufacturers, recipients a sharp share price hammering during the previous week’s sell-off, mostly recovered too. An underlying issue remains, shared with South Korea, of how to avoid getting sucked into trade conflicts with China that could subvert their own export strengths.

INDIA — SENTIMENT SULLIED

Mumbai’s BSE Sensex 30 market index declined for a fifth consecutive week, 0.6% down on a swathe of losses across all sectors. All major indigenous listed motorcycle producers were among these losers. For investors, the grim mood was underlined by a Reserve Bank of India policy meeting, stressing the level of risk from inflation.

CHINA — TIMOROUS TINKERING

China’s economic outlook is becoming increasingly dire, and was dealt yet another blow after the latest policy decision by central bankers in Beijing dramatically undershot market expectations. The People’s Bank of China cut its one-year loan prime interest rate — a reference for bank lending — by ten basis points to 3.5%. But then spoilt any stimulus impact by opting to keep the equivalent five-year rate steady at 4.2%.

Equities investors weren’t amused and stock indices plunged for a third consecutive week. Shanghai’s all-share SSE Composite fell by 3% and the blue-chip CSI 300 closed a sharper 3.4% down. Listed Chinese motorcycle manufacturers, without exception, were helpless victims of this sell-off.