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Below are Views On Daily Global Market Update 2nd November 2021 By Asheesh Chanda, Kristal.AI

“The stock market opened the week on a high note yesterday with the small cap or Russell 2000 Index leading the pack with a healthy 2.66% gain. Russell 2000 has been rangebound between 2350s and 2080s for the last 7-8 months. Yesterday the index closed at 2358 level. Intraday, Dow also traded above 36k for the first time ever while the SPX Index was up 18bps and tech heavy Nasdaq up 63bps.

9 out of 11 sector ETFs traded positive. Consumer discretionary ripped 1.83% to new highs and Energy ETF XLE was up 1.72% after a slight pullback last week.

Japanese equities also rallied more than 2.5% yesterday as investors welcomed the results of Japan's lower house elections, which saw the ruling Liberal Democratic Party win a clear majority thus paving the way for a fiscal stimulus.

This victory means PM Kashida will stay on as head of state. LDP has said they would double military spending to 2% of GDP (currently it's around 1%). This has come in as China is being seen as a growing threat in the region, especially related to Taiwan.

This morning Hang Seng tech stocks are also rallying on expectations that the easing U.S.-Sino trade tensions would help the battered sector.

Compared to equity markets, not much action was visible in the rates curve as markets await the FOMC meeting tomorrow. We have seen decent flattening in the 2s10s (20bps) and 5s30s (35bps) in the last month  leading to this Fed meeting.

With the Australia rate decision out this morning (RBA left cash rate unchanged at 0.10% and scraped the April 2024 0.1% govt bond yield target), we have UK and the Fed rate decision left for this week.

In other news, we have the COP26 climate summit taking place in Glasgow from 31st Oct- 12th Nov where countries are under pressure to increase action in the next decade to tackle climate change issues.

Indian PM Narendra Modi surprised delegates at the climate summit yesterday with a bold pledge: the world’s third-biggest emitter will reach net-zero by 2070. He also called on rich nations to live up to their financial commitments and make $1 trillion in climate finance available “as soon as possible” in order to protect developing nations most at risk of climate change.”

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