London (AFP) – Global stock markets mostly rose Thursday with traders mulling the outlook for US interest rates as Federal Reserve officials questioned the need for a cut anytime soon.
Oil prices were mixed following the previous day’s losses on data indicating softer demand in the United States and fading fears of a regional war in the Middle East.
Investors looked past a sell-off on Wall Street Wednesday, when tech firms were hit by worries that borrowing costs would be kept elevated longer than expected, as Netflix later Thursday kicks off a spate of earnings reports by tech firms.
Comments from Fed officials reinforced the view that sticky inflation and a resilient US economy will keep the bank from easing monetary policy anytime soon.
A rally across global markets, which saw some hit record highs this month, has given way to concerns that valuations may be overdone, and analysts said the current earnings season is key to maintaining momentum.
“The stock market has found it increasingly difficult to maintain intraday gains as participants have been in more of a de-risking mode following five straight monthly gains that have stretched valuations to a point that have clashed with rising interest rates,” said market analyst Patrick O’Hare at Briefing.com.
Expectations for US rate cuts in 2024 have fallen from six predicted at the start of the year to just two, while some analysts have even warned of a possible hike.
“The US central bank remains on track to cut rates twice this year, most likely starting at its September meeting,” said Solita Marcelli at UBS Group AG.
Oil prices were mixed after losing more than three percent Wednesday on figures showing a forecast-busting build-up in US stockpiles that raised questions about demand in the world’s top economy.
Relief that Israel had held off any retaliation for the weekend’s missile attack by Iran — soothing fears of a conflict between the Middle East foes — also weighed on oil prices.
Foreign exchange markets are also being closely followed after the dollar pushed uncomfortably higher against its peers as hopes for quick US rate cuts evaporate.
Particularly in focus are the yen and won after US Treasury Secretary Janet Yellen joined her Japanese and South Korean counterparts in saying they were keeping an eye on movements.
The statement came after South Korea’s Choi Sang-mok and Japan’s Shunichi Suzuki shared “serious concerns” on the recent weakness of their currencies and agreed to take “appropriate actions” to counter extreme volatility.
Analysts said the statement with Yellen suggested Washington would not push back against intervention by the countries.
The yen has lost almost nine percent this year and the won about seven percent.
“The fact that the yen has resumed its selling suggests traders are now either testing the patience of authorities or calling their bluff, as verbal intervention has so far been ineffective,” said Fawad Razaqzada, market analyst at City Index and FOREX.com.
– Key figures around 1530 GMT –
New York – Dow: UP 0.7 percent at 38,028.63 points
New York – S&P 500: UP 0.5 percent at 5,048.86
New York – Nasdaq Composite: UP 0.5 percent at 15,761.70
London – FTSE 100: UP 0.4 percent at 7,877.05 (close)
Paris – CAC 40: UP 0.5 percent at 7,877.05 (close)
Frankfurt – DAX: UP 0.4 percent at 17,837.40 (close)
EURO STOXX 50: UP 0.5 percent at 4,936.57 (close)
Tokyo – Nikkei 225: UP 0.3 percent at 38,079.70 (close)
Hong Kong – Hang Seng Index: UP 0.8 percent at 16,385.87 (close)
Shanghai – Composite: UP 0.1 percent at 3,074.22 (close)
Dollar/yen: UP at 154.58 yen from 154.36 yen on Wednesday
Euro/dollar: DOWN at $1.0663 from $1.0676
Pound/dollar: UP at $1.2462 from $1.2455
Euro/pound: DOWN at 85.54 pence from 85.69 pence
West Texas Intermediate: FLAT at $82.68 per barrel
Brent North Sea Crude: DOWN 0.3 percent at $87.01 per barrel
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© 2024 AFP
