Shares of GSK, Sanofi and Haleon soared after a US judge dismissed claims that the heartburn drug Zantac had caused cancer.

The annual increase in producer prices is easing across the globe. Added to lower shipping costs and signs that China may soon reopen its economy, hopes are rising that inflation may have peaked.

UK

The FTSE 100 fell 1.1% over the week.

Chancellor Jeremy Hunt announced a package of reforms for the financial services industry.

The value of retail sales rose 4.2% year on year in November, well behind the rate of inflation.

US

The S&P 500 lost 3.4% over the week, while the tech-heavy Nasdaq dropped 4.0% as stronger-than-expected factory gate prices dashed hopes that the Fed may be nearing the end of its rate-hiking cycle.

ISM non-manufacturing index rose to 56.5 in November from 54.4 the previous month. The US services sector has now expanded for 30 consecutive months.

US producer prices rose 0.3% over the month of November. On a year-on-year basis, producer prices inflation eased to 7.4% from 8.1% in October, although the data was stronger than analysts had forecast.

The University of Michigan index of US consumer sentiment unexpectedly jumped to 59.1 in December  from 56.8 in November.

The Bank of Canada raised its benchmark rate by 50 basis points, signalling it may pause its monetary tightening following seven consecutive rate increases – the first G10 country to do so.

Europe

The FTSEurofirst 300 slid 0.9% over the week.

Eurozone third-quarter GDP growth was revised up to 0.3% from a previous estimate of 0.2%.

German factory gate prices fell 4.2% in October compared with the previous month, the largest monthly drop since 1948.

Japan

The Nikkei 225 rose 0.5% over the week.

Pacific ex Japan

The Reserve Bank of Australia raised the cash rate by 25 bps to a decade-high level of 3.1%.

China’s exports fell 8.7% year on year in November, a far larger-than-expected decline and the largest drop since the start of the pandemic. Imports fell 10.6%, the biggest drop in two and a half years.

Chinese producer prices declined 1.3% year on year in November, while the consumer price index rose 1.6%, down from 2.1% in October.

Hopes that China will reopen its economy early next year increased when Beijing further relaxed COVID restrictions, including allowing home quarantine and dropping the need for proof of a negative test before being allowed to enter public places. While the number of reported COVID-19 cases has dropped, Beijing has dropped some of its testing requirements. Hong Kong followed mainland China in easing some Covid-19 restrictions.

Emerging Markets

The Reserve Bank of India raised its key repo rate by 35 bps to 6.25%, its fifth hike in a row.

Brazil’s president-elect Luiz Inácio Lula da Silva named workers’ party loyalist Fernando Haddad as finance minister, dashing hopes he would appoint a more market-friendly figure.

Bonds

The Reserve Bank of India raised its key repo rate by 35 bps to 6.25%, its fifth hike in a row.

Commodities

Brent crude oil fell below $80 a barrel, its lowest level of the year, following the imposition of sweeping western sanctions on Russia’s oil exports.