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Asian markets track Wall St record as US jobs fuel rate cut hopes

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Asian Markets

Asian markets extended a surge on Wall Street Thursday as another round of soft US jobs data ramped up bets on the Federal Reserve cutting interest rates this year.

Worries about the world’s top economy sparked by a below-par factory gauge earlier this week appear to have been superseded by renewed optimism that an extended period of elevated borrowing costs is finally kicking in.

Figures from payroll firm ADP on Wednesday showed private-sector hiring slowed far more than estimated in May.

That came a day after news that job openings had fallen more than expected and pointed to a softening labour market, a key goal of Fed officials along with falling inflation.

The data fanned hopes that the Fed can start to cut interest rates from their two-decade highs, and traders have priced in almost two before the end of 2024, with some pencilling in September for the first.

“Momentum continues as US data starts to weaken… possibly supporting earlier rate cuts from the Fed this year,” said Charu Chanana at Saxo.

Investors are now set up for the release of the crucial non-farm payrolls report, which is due Friday and should provide a clearer snapshot of the labour market and the US economy.

That comes ahead of next week’s Fed policy meeting, where it will also unveil its latest “dot plot” of rate expectations.

Its previous guidance — in March — was for three cuts but many are preparing for that to be whittled down in light of recent data showing inflation remains sticky and decision-makers’ reluctance to move too early.

“The ‘dots’ are likely to cluster around one or two interest rate cuts this year,” Capital Economics’ Stephen Brown said.

“Nevertheless, as inflation falls a bit faster than officials expect and (gross domestic product) growth disappoints, our base case remains that the Fed will cut in September.”

Optimism over a rate cut has been boosted by news that Canada’s central bank had done so on Wednesday, while the European Central Bank is expected to later on Thursday.

All three main indexes on Wall Street advanced, with the S&P 500 and Nasdaq hitting fresh records.

The rally in New York came on the back of a surge in tech titans including chip-making darling Nvidia, which became only the third US company in history to break $3 trillion in market capitalisation, after Apple and Microsoft.

Asian markets built on the gains, with Hong Kong, Tokyo, Shanghai, Sydney, Singapore, Taipei, Manila and Jakarta all enjoying buying interest.

Mumbai futures rose after Indian Prime Minister Narendra Modi formed a coalition government — having lost his majority in the country’s general election — raising hopes he will be able to push through economy-boosting measures.

Shares in India have swung wildly between big gains and losses this week after exit polls pointing to a landslide for Modi’s Bharatiya Janata Party (BJP) were proved wrong.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 0.9 percent at 38,841.75 (break)

Hong Kong – Hang Seng Index: UP 1.0 percent at 18,616.78

Shanghai – Composite: UP 0.3 percent at 3,075.88

Dollar/yen: DOWN at 155.70 yen from 156.12 yen on Wednesday

Euro/dollar: UP at $1.0889 from $1.0873

Pound/dollar: UP at $1.2803 from $1.2789

Euro/pound: UP at 85.05 pence from 85.00 pence

West Texas Intermediate: UP 0.6 percent at $74.50 per barrel

Brent North Sea Crude: UP 0.4 percent at $78.74 per barrel

New York – Dow Jones: UP 0.3 at 38,807.33 (close)

London – FTSE 100: UP 0.2 percent at 8,246.95 (close)

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Weekly U.S. Stock Market Reports Diverse Performance

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Reviewing the U.S. Stock Markets, the Nasdaq Composite, recorded a decent hike of 555 points, reaching a closing value of 17,688 points by the end of the week. Similarly, the S&P 500 index showed a positive trend, gaining 85 point to settle at 5,431 points. Meanwhile, DJIA Index experienced a notable drop, losing 209 points during the week and concluding at 38,589 points after a week of gaining.

In contrast, Russell 3000 Index saw a gain in week performance, with a slight hike of 40 points to reach 3,077 points by the end of the week.

Moving to Russell 2000 Index, demonstrated a notable drop of 20 point, ending the week at 2,006 points.

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Weekly European Stocks Shows Negative Result

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In the Outgoing week, the European stock market displayed a massive losing performance.

Here is the data on the weekly performance of the European Stock Market, The STOXX Europe 600 index, which is considered a leading benchmark for the European market and covers approximately 90 percent of the market capitalization across 17 countries, reported a drop of 12.5 points to close at 511.05.

The United Kingdom’s FTSE 100, one of the most widely followed indices in Europe, also showed a significant drop, losing 99 points or finishing the session at 8,146.

In Germany, the DAX 30 index, lost by 555 points to reach 18,002, while France’s CAC 498 decreased by 9 points to stop at 7,503 at the end of the trading day.

Italy’s FTSE MIB, which covers the top 40 stocks traded on the Milan Stock Exchange, decreased by 1,995 points to 32,665. However, Spain’s IBEX 35, added by 412 points, to close at 10,992.

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South Asian Stocks Reports Gaining Performance in Recent Week

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A review of South Asian stock markets shows that India’s Bombay Stock Exchange (BSE) index BSE Sensex has added 299 points during the week. At the end of the week, the index stood at 76,992 points. On the other hand, the Nifty-50 index of the country’s National Stock Exchange gained by 175 points last week. At the end of the week, the index stood at 23,465 points.

Pakistan Stock Exchange Index ‘KSE 100’, shed 2,926 points last week. After a week of losing, the index settled at 76,742 points.

On the other hand, The Sri Lankan stock market index adds, and the Colombo Stock Exchange index ‘ASPI’ increased by 208 points in a week. After a week the index settled at 12,314 points.

Bhutan’s stock market index ‘BSI’ added 68 points hence the index stood at 1,515 points throughout the whole week. Nepal’s ‘NEPSE’ gain 35 points, therefore the index stands at 2,112 points.

Hence Dhaka Stock Exchange: The benchmark index ‘DSEX’ dropped by 119.51 points or 2.28 percent, in the outgoing week. At the end of the week, the index stands at 5,117 points.

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