Stocks
Asian Markets React to US Inflation Data, Dollar Hits 34-Year High Against Yen
Asian markets experienced a reversal on Thursday following forecast-topping US inflation data, which dealt a substantial blow to hopes for a June interest rate cut. Traders were forced to re-evaluate the outlook for monetary policy, with a warning that the next move could even be a hike.
The losses mirrored a sell-off on Wall Street and resulted in the dollar reaching a 34-year high against the yen, sparking speculation that Japanese authorities would intervene to support their struggling currency.
Figures revealing a 0.4 percent on-month and 3.5 percent on-year increase in the consumer price index were both above consensus for the third consecutive month. Observers cautioned that the pick-up might not be a temporary blip but could indicate a concerning trend.
These numbers followed other data, including a forecast-beating jobs report, suggesting that the US economy, despite borrowing costs being at a two-decade high and inflation well above target, remained robust.
The reading provides Federal Reserve officials with more to consider ahead of their May policy meeting, with their recent guidance of three rate cuts this year now in question.
Investors began the year hopeful that the central bank would implement six cuts in 2024, starting with one in March. However, they are now considering at most two cuts, with the likelihood of a June reduction decreasing.
However, some remain less optimistic. Torsten Slok from Apollo Global Management stated, “We are sticking to our view that the Fed will not cut rates in 2024.” Meanwhile, former Treasury Secretary Lawrence Summers warned that traders must “take seriously the possibility that the next rate move will be upwards rather than downwards.”
Despite concerns, minutes from the Fed’s recent meeting indicated that while decision-makers were apprehensive about recent figures, they still envisioned cuts this year.
“However, a few participants noted that residual seasonality could have affected the inflation readings at the start of the year,” the Fed stated.
Neil Wilson from Finalto added that “despite the hot number, there are many reasons why the Fed may still cut in June… but if the market moves too far out of step then the Fed may be forced to wait a little longer.”
The disappointing data sent all three main indexes on Wall Street into the red, and Asia followed suit, with Hong Kong, Tokyo, Sydney, Seoul, Singapore, Wellington, Taipei, and Manila all seeing declines.
“The fallout from the hotter-than-expected US inflation read… will reverberate across regional equity markets (Thursday),” observed Tony Sycamore of IG Australia.
“Investors were keeping tabs on Tokyo as the dollar surged to 153.24 yen, the strongest since 1990, on the US CPI reading.”
Authorities in Tokyo have indicated they would keep their options open on supporting the yen. However, while top currency official Masato Kanda has attributed volatility in the dollar-yen exchange to speculators, analysts noted that the latest moves were more related to the US data.
“It’s clearly a US dollar move and Japanese officials can’t really argue its speculators attacking the yen,” commented Peter Vassallo of BNP Paribas Asset Management.
Dhaka Stock Exchange DSE, Bourse on the last working day of the week, 16th May, ended with a drop in Indices and hike in Turnover from the previous working session. This information is known from DSE sources.
676 crore 79 lakh taka shares were traded on this day. 150 crore 46 lakh more tradings were done in DSE today compared to the previous workday, 15th May , Shares worth Tk 526 crores 33 lakh shares were traded last time, Wednesday.
The benchmark DSEX lost 9.98 points or 5,517 The Shariah-based index DSES dropped 0.80 points or 1,212, and the blue-chip index DS30 decreased by 3.79 points or 1,973.
Of the issues traded, 122 advanced, 215 declined and 57 remained unchanged.
MBL 1st Mutual Fund ranked top gainer on DSE, the share price increased by Tk 0.50 paisa or 10 percent. On this day, the share was last traded at Tk 5.50 paisa.
Sonali Paper & Board Mills Limited ranked top loser on the DSE, the share price dropped by Tk 11.80 paisa or 3.00 percent. On this day, the share was last traded at Tk 382.50 paisa.
DSE topped on trade is Asiatic Laboratories Limited 46 crore 23 lakh takas of company shares have been traded.
A total of 43 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 3 crore 22 lakh 1 thousand 792 shares of the companies were traded. The financial value of which is 49 crore 85 lakh taka
Dhaka Stock Exchange DSE, Bourse on the fourth working day of the week, 15th May, ended with a drop in Indices and Turnover from the previous working session. This information is known from DSE sources.
526 crore 33 lakh taka shares were traded on this day. 138 crore 3 lakh less tradings were done in DSE today compared to the previous workday, 14th May , Shares worth Tk 664 crores 36 lakh shares were traded last time, Tuesday.
The benchmark DSEX lost 58.22 points or 5,527 The Shariah-based index DSES dropped 12.79 points or 1,212, and the blue-chip index DS30 decreased by 14.14 points or 1,977.
Of the issues traded, 61 advanced, 301 declined and 33 remained unchanged.
Reliance One the first scheme of Reliance Insurance Mutual Fund ranked top gainer on DSE, the share price increased by Tk 1.50 paisa or 8.77 percent. On this day, the share was last traded at Tk 18.60 paisa.
Bay Leasing & Investment Limited ranked top loser on the DSE, the share price dropped by Tk 0.30 paisa or 3.00 percent. On this day, the share was last traded at Tk 9.70 paisa.
DSE topped on trade is Alif Industries Limited 19 crore 21 lakh takas of company shares have been traded.
A total of 45 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 68 lakh 31 thousand 91 shares of the companies were traded. The financial value of which is 37 crore 38 lakh taka
Dhaka Stock Exchange DSE, Bourse on the third working day of the week, 14th May, ended with a drop in Indices and Turnover from the previous working session. This information is known from DSE sources.
664 crore 36 lakh taka shares were traded on this day. 17 crore 86 lakh less tradings were done in DSE today compared to the previous workday, 9th May , Shares worth Tk 968 crores 2 lakh shares were traded last time, Monday.
The benchmark DSEX lost 81.14 points or 5,585 The Shariah-based index DSES dropped 15.76 points or 1,225, and the blue-chip index DS30 decreased by 26.04 points or 1,991.
Of the issues traded, 31 advanced, 343 declined and 25 remained unchanged.
Reliance One the first scheme of Reliance Insurance Mutual Fund ranked top gainer on DSE, the share price increased by Tk 1.50 paisa or 9.55 percent. On this day, the share was last traded at Tk 17.10 paisa.
Union Insurance Company Limited ranked top loser on the DSE, the share price dropped by Tk 4.00 paisa or 9.32 percent. On this day, the share was last traded at Tk 38.90 paisa.
DSE topped on trade is eGeneration Limited 28 crore 18 lakh takas of company shares have been traded.
A total of 45 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 74 lakh 95 thousand 900 shares of the companies were traded. The financial value of which is 34 crore 92 lakh taka
