Markets may not be out of the woods yet after 'March madness'

The volatility and pullbacks can offer opportunities for long-term investors

- Ven Sreenivasan

If ever there was a definition for "March madness", last week could have been a pretty good fit.

A banking crisis, fears of contagion, memories of the 2008 financial crisis and economic data that was somewhat less market-friendly than hoped for.

A crisis which started with Silicon Valley Bank in the United States quickly spread eastwards to New York-based Signature Bank, then hit First Republic Bank by the end of the week, fraying nerves and wiping billions of dollars off equity and bond markets.

Meanwhile, data showing continuing robustness in the United States job markets and higher-than-expected February core consumer prices suggests that the Fed will not make a much-hoped-for pivot.

That said, signs of slowing retail sales and plateauing consumer confidence suggest that the US economy is starting to slow - a key requisite to bringing inflation down.

The Dow Jones Index went through a tumultuous five days to end just 0.15 per cent down for the week at 31,861.98 points, while the S&P 500 gained 1.4 per cent to end last Friday at 3,916.64 points. A sudden return of appetite for tech stocks saw the Nasdaq surge 4.4 per cent for the week to 11,630.51.

In Singapore, the Straits Times Index (STI) closed at 3,183.28 points, just 0.2 per cent up for the week - marking a notable break below its 3,200-point support level.

While there were institutional outflows of around $110 million during the week, this was more than made up for by triple the amount of retail inflows, at almost $350 million.