Markets
Global Markets Report - 15 November
ASX set to rise at the open, after US stocks surged on news of lower than expected October CPI.
Australia
Australian shares are set to rise at the open, after US stocks surged on news of lower than expected October CPI.
ASX futures were up 1.3% or 91 points as of 8:30am on Wednesday, suggesting a higher open.
US stocks soared after October CPI slowed to an increase of just 3.2%, which has investors betting the Fed is done raising interest rates.
Major indexes post some of the biggest increases of the year on hopes for a soft landing for the economy. DJIA gained 489 points, or 1.4%, to 34827, the S&P 500 jumped 1.9% to 4495 and the Nasdaq added 2.4% to 14094.
Every sector saw gains, while interest rate sensitive real estate stocks lead with a 5.3% rise.
In commodity markets, Brent crude oil fell 0.1% to US$82.47 a barrel while gold rose 0.8% to US$1,962.97.
In local bond markets, the yield on Australian 2 Year government bonds was unchanged at 4.34% while the 10 Year yield was down at 4.66%. US Treasury notes fell, with the 2 Year yield at 4.83% and the 10 Year yield at 4.45%.
The Australian dollar hit 65.05 US cents up from the previous close of 63.76. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was down at 98.85.
Asia
Chinese shares closed broadly higher ahead of the long-awaited Xi-Biden meeting on Wednesday. Natixis economist Alicia Garcia Herrero reckoned that the summit wasn't a solution to the most urgent bilateral and global problems, but crucial in keeping dialogue open and reducing the likelihood of a global military conflict. Software and real estate stocks led the gains with iFlytek up 0.55%, Shanghai Baosight Software adding 0.4%, China Vanke 0.5% higher and Poly Developments & Holdings Group advancing 0.7%. Energy stocks weighed with PetroChina losing 0.6% and CNOOC down 1.25%. The benchmark Shanghai Composite Index rose 0.3% to 3056.07, the Shenzhen Composite Index gained 0.4% higher and the tech-heavy ChiNext Price Index slipped 0.2%.
Hong Kong shares ended a day of choppy trading lower, with weakness in tech stocks offsetting buying in property, finance and other sectors. Anta Sports lost 4.9%, Meituan dropped 3.0%, KE Holdings shed 2.6%, Xiaomi fell 2.2% and Alibaba declined 1.8%. Among gainers, China Resources Lands added 3.7% and Great Wall Motor rose 2.6%, while insurance companies CPIC, Ping An and China Life added 2.1%, 1.7% and 1.7%, respectively. The benchmark Hang Seng Index closed 0.2% lower at 17396.86, with the local tech index losing 0.7% to 3951.75. Next up on Wednesday: investors will digest implications of a new U.S. inflation print while gauging the strength of China's economic recovery via fresh data on industrial output and retail sales.
Japan's Nikkei Stock Average rose 0.3% to close at 32695.93 ahead of the first meeting in a year between U.S. President Biden and Chinese President Xi Jinping this week. News reports suggest conciliatory stances on both sides ahead of the meeting, which has contributed to an improvement in market sentiment, the APAC strategy team at Saxo Markets says in a commentary. The best performers on the benchmark index included Taisei Corp., which climbed 6.6%, Isuzu Motors, which added 4.3%, and Sumitomo Electric Industries, which was 4.1% higher. The 10-year JGB yield was 2 bps lower at 0.850%.
India stock markets were closed for the Diwali Balipratipada holiday.
Europe
European stocks rose sharply in late trade as slightly weaker-than-expected U.S. inflation data added to the view that the Federal Reserve is unlikely to raise interest rates further. "The cooler numbers will likely bolster expectations among investors that the Fed will keep interest rates steady; even if Fed Chair Powell appears keen to keep a possible further rate hike on the table," writes Richard Flax, chief investment officer at European digital wealth manager Moneyfarm. The pan-European Stoxx Europe 600 index rose 1.4% to 452.81, Germany's DAX jumped 1.7% and France's CAC 40 added 1.5%, buoyed by gains for real estate, mining, tech and industrial stocks.
The FTSE 100 index closed Tuesday up 0.2% to 7440 points, lifted by the mining sector as global stocks jumped after weaker-than-expected U.S. consumer price inflation, IG senior market analyst Axel Rudolph says in a note. "Fed rate cut expectations have been brought forward to May 2024 with analysts now anticipating to see four rate cuts before the end of next year and rates to come back down to 4.25% to 4.50%," he says. DCC was the blue-chip index's best performer with shares closing up 12.5% after the group backed its guidance for the year and set out the acquisition of Germany's Progas, followed by retailer Ocado, up 10.1%. On the opposite side, Vodafone shares slipped 5.5% after the group reported a swing to net loss.
North America
US stocks soared after October CPI slowed to an increase of just 3.2%, which has investors betting the Fed is done raising interest rates.
Major indexes post some of the biggest increases of the year on hopes for a soft landing for the economy. DJIA gained 489 points, or 1.4%, to 34827, the S&P 500 jumped 1.9% to 4495 and the Nasdaq added 2.4% to 14094.
Every sector saw gains, while interest rate sensitive real estate stocks lead with a 5.3% rise.
The dollar weakened along with Treasury yields, while gold prices got a lift.
Home Depot shares rose 5.4% after posting better-than-expected results.
