Australia

Australian shares are expected to rise this morning following a positive day on Wall Street. Investors welcomed strong retail spending data as a sign that the US economy remains resilient despite the Federal Reserve's aggressive policy tightening.

ASX futures were up 27 points or 0.4% as of 6:00am on Friday, suggesting gains at the open.

US stocks rose Thursday, lifted by gains in everything from shares of manufacturers to oil producers.

Markets have been buoyant in recent weeks. The S&P 500 on Thursday scored its sixth straight session of gains, its longest winning streak since an eight-session run in November 2021, according to Dow Jones Market Data.

The S&P 500 added 1.2%, the Nasdaq Composite picked up 1.2%, and the Dow Jones Industrial Average jumped 1.3%, or 429 points. Canada’s benchmark S&P/TSX Composite gained 0.1%.

Investors have been cheered by data showing the US economy has continued to hold strong, despite the Federal Reserve executing its fastest series of interest rate increases since the 1980s. The central bank held rates steady Wednesday, but hinted it could raise rates at least twice more this year to try to rein in inflation.

Many money managers have worried about the central bank's monetary policy tipping the US into recession. So far, however, economic reports have pointed to more resilience than expected.

Commerce Department data released Thursday showed retail spending rose 0.3% in May, compared with the month before. Economists surveyed by The Wall Street Journal had expected a 0.2% decline. Spending rose at a variety of retailers, including grocery stores, car dealerships and hardware stores.

In commodity markets, Brent crude oil gained 3.3% to US$75.60 a barrel while gold climbed 0.8% to US$1,958.44.

Australian government bonds were higher, with the 2 Year yield increasing to 4.17% and the 10 Year yield rising to 4.00%. US Treasury notes were also higher, with the 2 Year yield rising to 4.64% and the 10 Year yield climbing to 3.72%.

The Australian dollar jumped to 68.86 US cents from its previous close of 67.93. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, edged down to 96.22.

Asia

Chinese shares ended higher Thursday, buoyed by hopes for more stimulus amid new data showing a further slowdown in China's economy. "To counteract the persistent weakness in the economy, we expect more (targeted) demand-side easing measures in coming months, which could be announced as early as Friday, especially on fiscal and housing," Goldman Sachs economists said in a note. Shares across sectors, from automakers to consumer-related companies, rose. BYD Co. was 3.4% higher and China Tourism Group Duty Free jumped 7.3%. Software makers were among the losers, retreating from previous gains. Beijing Kingsoft Office Software fell 4.5%. The Shanghai Composite Index climbed 0.7% to 3252.98. The Shenzhen Composite Index rose 1.2% and the ChiNext Price Index increased 3.4%.

Hong Kong shares ended higher amid optimism over the potential for China to ease policy. The Hang Seng Index closed 2.2% higher at 19828.92. Weak economic data and rate cuts suggest that policymakers feel an urgency to step up policy support, said Larry Hu, economist from Macquarie. Tech companies and developers led the gainers. The Hang Seng Tech Index increased 3.6% with Meituan rising 7.8% and JD.com jumping 5.2%. The Hang Seng Mainland Properties Index was up 3.5%. Country Garden Holdings rose 6.25% and Longfor Group increased 4.4%. Among the weak spots was the energy sector, with CNOOC down 0.7%.

The Nikkei Stock Average of Japan edged 0.1% lower to close at 33485.49 on possible profit-taking after the Japanese benchmark index rose for a fourth straight session Wednesday to a new 33-year high. The worst performers on the Nikkei included Eisai, which slipped 5.9%, Rakuten Group, which lost 5.3%, and Daiichi Sankyo, which was 4.0% lower. Meanwhile, Nomura Holdings rose 4.4%, Japan Exchange Group added 3.3% and Kubota was 3.1% higher.

Indian shares ended lower, bucking the trend of rising Asian stock markets. The benchmark Sensex fell 0.5% to 62917.63, pulling back from a three-day winning streak. Some analysts point to fears of further Fed rate increases, even though the central back paused monetary tightening in June. The worst performers on the benchmark index included IndusInd Bank and State Bank of India, down 1.8% each. Kotak Mahindra Bank lost 1.7% and ICICI Bank shed 1.5%.

Europe

European stocks mostly fell after the European Central Bank increased interest rates by 0.25 percentage points to 3.5%. The pan-European Stoxx Europe 600 dropped 0.2%, the German DAX lost 0.1% and the French CAC 40 retreated 0.5%.

While the ECB's rate move matched expectations, the central bank notably revised its inflation forecasts higher and said a July rate hike was likely, Insight Investment said. "We expect the ECB to remain firmly focused on inflation and while the market's initial reaction has been hawkish, we witnessed the familiar reversal in markets over the course of the press conference, with bonds rallying back from their initial sell-off," Insight's Jan Felix Gloeckner wrote.

The United Kingdom’s FTSE 100 Index closed up 0.3% to 7628 points, outperforming its European peers after a hawkish rate hike from the European Central Bank. The health care, energy and consumer staples sectors gained, helping to offset the weakness in basic resources and financials, CMC Markets analyst Michael Hewson said in a note. Retailer Ocado led the British index with a rise of 5.1%, followed by Informa and RS Group, up 3.4% and 2.0% respectively. On the opposite side, bank NatWest's shares were down 3.5%, while Halma lost 3.4% after reporting a FY 2023 performance below expectations.

North America

US stocks rose Thursday, lifted by gains in everything from shares of manufacturers to oil producers.

Markets have been buoyant in recent weeks. The S&P 500 on Thursday scored its sixth straight session of gains, its longest winning streak since an eight-session run in November 2021, according to Dow Jones Market Data.

The S&P 500 added 1.2%, the Nasdaq Composite picked up 1.2%, and the Dow Jones Industrial Average jumped 1.3%, or 429 points. Canada’s benchmark S&P/TSX Composite gained 0.1%.

Investors have been cheered by data showing the US economy has continued to hold strong, despite the Federal Reserve executing its fastest series of interest rate increases since the 1980s. The central bank held rates steady Wednesday, but hinted it could raise rates at least twice more this year to try to rein in inflation.

Many money managers have worried about the central bank's monetary policy tipping the US into recession. So far, however, economic reports have pointed to more resilience than expected.

Commerce Department data released Thursday showed retail spending rose 0.3% in May, compared with the month before. Economists surveyed by The Wall Street Journal had expected a 0.2% decline. Spending rose at a variety of retailers, including grocery stores, car dealerships and hardware stores.

Money managers said markets also seemed to be largely looking past the Fed's signaling from Wednesday. The central bank's dot plot, a chart showing officials' projections for rates in the coming years, showed a majority of officials expect the Fed to push through two more quarter-percentage-point rate increases this year.

"There's some skepticism now with the Fed pausing as to whether they'll really hike" rates further, said Jason Pride, chief of investment strategy and research at Glenmede. Markets seemed to shrug off the Fed's messaging "really, really quickly," he added.

Stock gains were broad Thursday, with all of the S&P 500's 11 sectors closing higher. Seven sectors rose by at least 1%.

Shares of Mediterranean-style restaurant chain Cava Group, which made their stock market debut Thursday, jumped 99% to $43.78. The company had priced its initial public offering at $22 per share Wednesday.

Consumer staples shares rose, with Target and Estée Lauder among the sector's biggest gainers.

Kroger, however, bucked the trend. The grocer, which reported quarterly sales that came in below analysts' estimates, fell 2.7% to $45.94 and was among the S&P 500's biggest decliners for the day.

Microsoft shares added 3.2% to $348.10, closing at a fresh record.