Australia

The Australian sharemarket is set to advance today following a positive quarter-end for US equities. Despite a volatile three months for bank shares, all three US indices closed Q1 with gains. Meanwhile, the PCE index, a key gauge on US inflation, rose less than expected in February.

ASX futures were 41 points or 0.6% in the green as of 7:00am on Saturday, suggesting a higher open.

US stocks ended the quarter on a positive note, after a stormy three months in which markets have been whipsawed by strains in the banking system, as well as shifting outlooks for inflation and interest rates.

Government data early Friday showed the Federal Reserve's preferred measure of inflation, known as the core personal-consumption expenditures price index (PCE), slowed in February, lifting hopes the central bank could limit its campaign to curb inflation sooner than originally expected.

The S&P 500 gained 1.4%, while the Dow Jones Industrial Average added 1.3%. The tech-heavy Nasdaq Composite leaped 1.7%.

Markets shook off the Thursday indictment of former president Donald Trump, which was related to his role in hush money payments to a former adult film star on the eve of the 2016 election.

In commodity markets, Brent crude oil edged up 0.6% to $US79.77 a barrel while gold lost 0.5% to US$1,971.20.

Australian government bonds were lower, with the 2 Year yield dipping to 2.94% and the 10 Year falling to 3.29%. US Treasury notes were also down, with the 2 Year yield sinking to 4.06% and the 10 Year declining to 3.48%.

The Australian dollar edged lower to 66.84 US cents after previously closing at 67.09. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, edged up to 96.22.

Asia

Chinese shares ended higher, boosted by upbeat March PMI data, which signaled the country's reopening recovery is well on track. "Domestic growth drivers from construction to services continue to improve," said Citigroup economists in a research note. Software companies and the retail sector led gains. iFlytek rose 4.9% and index heavyweight Kweichow Moutai was up 1.1%. The energy sector and banking stocks led the losers. PetroChina dropped 1.3% and Bank of China fell 0.6% after its 2022 earnings missed the expectation. The benchmark Shanghai Composite Index closed 0.4% higher at 3272.86. It finished the month 0.2% lower, narrowing its year-to-date gains to 5.9%. The Shenzhen Composite Index gained 0.8% today and the ChiNext Price Index added 0.7%.

Hong Kong stocks ended the session higher, extending their rally to a third straight day as big tech shares continued rising. The benchmark Hang Seng Index rose 0.45% to settle at 20400.11. JD.com shares led the pack, as investors welcomed the Chinese tech giant's latest move to spin off two units and list them separately in Hong Kong. The stock surged 5.4%. Other internet companies followed the momentum, with Alibaba gaining 3.6% and NetEase up 1.55%. The market got further support from a mixed range of sectors, with clothing manufacturer Shenzhou International advancing 6.6% after posting a 35% profit rise for 2022. Insurer China Life gained 3.9% and pork producer WH Group added 2.9%. The Hang Seng Tech Index ended 0.8% higher at 4303.7.

Japanese stocks ended higher, led by gains in steel and electronics shares, amid lessened prospects for policy tightening by central banks. Nippon Steel gained 3.9% and Renesas Electronics climbed 4.6%. The Nikkei Stock Average rose 0.9% to 28041.48. The index has gained 7.5% in the first quarter of 2023.

India's Sensex rose 1.8% to close at 58991.52 amid gains in US stock futures ahead of the release of US PCE price-index data. A reading in line with expectations, or ideally lower than expected, could keep the Fed hawks at bay, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in an email. A mixed bag of companies led gains on the benchmark index, with Reliance Industries climbing 4.3%, Nestle India adding 3.3% and Infosys 3.2% higher. The Sensex posted a 3.0% decline this quarter, snapping two consecutive quarters of gains.

Europe

European stocks rose amid economic optimism and relief about a lack of further banking shocks. The pan-European Stoxx Europe 600 and the German DAX gained 0.7% and the French CAC 40 advanced 0.8%, with airlines gaining height after broker upgrades and positive comments about the summer travel outlook.

"Equities seem set to round off the quarter on a very solid note," IG analyst Chris Beauchamp wrote. "The lower PCE figure in the US was just what the doctor ordered and provided investors with reason to take a sunnier view of the outlook as they peer into Q2. Having escaped without any more bank failures this week, hopes will rise that the crisis of March is now behind us."

In the United Kingdom, the FTSE 100 climbed 0.2% to 7632 points after gains in Asian stocks and a higher US close Thursday. UK sentiment is "marginally buoyed by the global gains elsewhere, but share price movements in early trade were dominated by broker notes, with upgrades to the likes of Beazley, International Consolidated Airlines and Pearson providing early boosts. On the flipside, red pens were taken to some stocks within the utility and banking sectors, such as SSE and NatWest," Interactive Investor analyst Richard Hunter wrote. Meanwhile, data Friday showed the UK economy grew 0.1% in the fourth quarter compared to the previous quarter, up from an earlier estimate of flat growth.

North America

US stocks ended the quarter on a positive note, after a stormy three months in which markets have been whipsawed by strains in the banking system, as well as shifting outlooks for inflation and interest rates.

Government data early Friday showed the Federal Reserve's preferred measure of inflation, known as the core personal-consumption expenditures price index (PCE), slowed in February, lifting hopes the central bank could limit its campaign to curb inflation sooner than originally expected.

The S&P 500 gained 1.4%, while the Dow Jones Industrial Average added 1.3%. The tech-heavy Nasdaq Composite leaped 1.7%.

Markets shook off the Thursday indictment of former president Donald Trump, which was related to his role in hush money payments to a former adult film star on the eve of the 2016 election.

"Political headlines have had less and less impact," said Brad McMillan, chief investment officer at Commonwealth Financial Network. "We have learned to live with a much higher level of chaos than we were used to a few years ago."

Shares of companies with ties to Mr. Trump rose, even though broader market reactions were muted. Digital World Acquisition Corp., the blank-check company that plans to merge with Mr. Trump's social-media company, was up 7.6%. Phunware Inc., an enterprise software company that worked on apps for Trump's 2020 presidential campaign, jumped 10.3%.

Investors are recalibrating after a tumultuous few weeks in global markets, which were upended early in March when the sudden collapse of several banks raised concerns about the health of the overall financial system. The Fed signaled it could ease up on interest rate hikes, partly because the banking turmoil is expected to cause stricter credit conditions.

Bank stocks have staged a partial recovery recently, helped in part by regulators stepping in with emergency measures to protect depositors and offer banks more liquidity. Many bank shares remain below where they were before the crisis, however.

The KBW Nasdaq bank index is up 1.9% this week but down 25% in March, its worst monthly performance since three years ago, when the Covid pandemic spread. Bank of America Corp., Wells Fargo & Co. and PNC Financial Services Group Inc. also had their worst month since March 2020, according to Dow Jones Market Data.

The troubled lender First Republic Bank closed out its largest quarterly drop on record, according to Dow Jones Market Data. Charles Schwab Corp. had its worst three months since 2008.

Still, the major indices ended the quarter higher. The S&P 500 added 7.5% since the start of the year, putting it on track for a second straight quarterly gain. The Nasdaq Composite Index gained 17.7%, its largest quarterly gain since 2020, and the Dow Jones has managed a 0.4% YTD increase.