Inflation worries triggered by signals from the US Federal Reserve helped send New York-listed shipping stocks into the red last week.
The 30 stocks under the coverage of investment bank Jefferies lost an average of 5% with only two registering gains on a week when the S&P 500 lost 1.9% and the small-cap Russell 2000 index shed 4.2%.
It was the worst week for the Dow Jones Industrial Average since October as the Federal Reserve's new guidance suggested higher inflation this year and the possibility of a rise in interest rates next year.
"This week’s results remind me of the first half of 2020 when shipping stocks followed the macro headlines regardless of the actual underlying fundamentals and rate movements," Jefferies lead shipping analyst Randy Giveans said.
"Clearly it is hard to fight the Fed as interest rate and inflation fears are widespread. That said, we continue to recommend buying our top shipping picks as they should outperform the broader markets, especially when the panic selling subsides."
The losses came across the board, as dry bulk and tanker owners plunged 6%, slightly better than the 7% drop from the LPG sector. Containerships fell 4% and LNG operators 1%.
The losses reduced gains by the Jefferies Shipping Index to 62.3% year to date and 38.9% year on year.
"For the week ahead, the Jefferies sponsored Marine Money Week should shed some positive light on the strong shipping markets, helping focus investor attention on the attractive fundamentals rather than the irrational fears," Giveans said.
