IMF Warned of “Third of the World” Plunging into Recession in 2023

World stocks inched higher, and the U.S. dollar moderately strengthened in light trading this European afternoon and first session of 2023, following warnings from the IMF, International Monetary Fund's managing director that “a third of the world” will fall into recession in 2023. The IMF joined a chorus of many big investment banks and OECD, predicting tough times ahead, and it would be just a matter of surprise otherwise amid the raging geopolitical standoffs. Markets in Australia, UK, Hong Kong, Ireland, Japan, Singapore and the United States, are still dormant due to the post-holiday chillouts.

As of 3:10 p.m. CET, the pan-European Stoxx 600 index climbed 0.9%, retracing some of the nearly 12% it lost in 2022, pummeled by central banks' aggressive monetary policy tightening. The German DAX is spearheading by 0.91%, while the French CAC 40 is also in the green by a convincing 1.52%. On the macro side, S&P Global’s final manufacturing Purchasing Managers’ Index (PMI) bounced to 47.8 in December from November’s 47.1, matching a preliminary reading but below the 50 mark separating growth from contraction.

Asian markets were moderately upbeat this morning. Thus, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.04%, just short of an index of global shares, which climbed 0.21%. Indian indices opened flat with positive bias on January 2 with Nifty above 18100. The India’s Sensex closed up 0.54% at 61,168, and the Nifty was up 0.51% at 18,197. Corporatewise in the region, Tata Steel, Tata Motors, Hindalco Industries, ONGC and IndusInd Bank were among major gainers on the Nifty, while losers were Bajaj Auto, Asian Paints, Maruti Suzuki, ITC and Sun Pharma. Meanwhile, South Korea's factory activity shrank for a sixth consecutive month in December, a famous business survey showed earlier today, as the global economic downturn and a local truckers' strike resulted in the worst demand slump in 21/2 years. The S&P Global purchasing managers' index (PMI) for South Korea manufacturers fell to a seasonally-adjusted 48.2 last month from 49.0 in November.