Global Markets Surge, Gold Firms on Fed Speculation; Oil Rises as Inventories Fall

APM Capital Market Report

• Mark Pussard, Head of Risk, APM Capital

Global Stock Market Wrap-Up: Monday Closing Quotes

Global markets experienced a surge on Wednesday, with major indices and currencies showing significant gains.

US market

Trading volume was muted Wednesday with the New York Stock Exchange closing early.

The S&P 500 index and technology-laden Nasdaq rose on Wednesday to post record high closes, as data pointing to a softening economy raised hopes the Federal Reserve could cut interest rates in September. The S&P 500 index closed higher on Wednesday, with a rise of 0.29% to 4,140.77

The Dow Jones Industrial Average closed slightly lower, pressured by selling in healthcare and consumer stocks during a shortened trading session ahead of the Fourth of July. The market will stay closed on Thursday for U.S. Independence Day, keeping trading volumes thin throughout the week. The Dow Jones Industrial Average (DJIA) closed at 39,308.0 on Wednesday, with a slight decrease of 23.85 points.

European market

European stocks closed higher Wednesday, as sentiment remains on edge ahead of two major elections.

After a negative performance last week, the pan-European Stoxx 600 has been choppy so far in July. The index provisionally closed 0.8% higher, with most sectors in the green led by mining stocks, up 2.3%.

U.K. inflation came in at 2.3% on an annual basis in April, data released Wednesday showed. This was above the forecast of 2.1%, but much closer to the Bank of England’s 2% target than March’s reading of 3.2%.

The STOXX Europe 600, fell by 2.89 points. The FTSE 100 in London gained 49.92 points or 0.61%, closing at 8,171.12. Germany’s DAX 30 performed the best, going up 331.3 points or 2.19%, to close at 15,4553. France’s CAC 40 surged 144 points or 2.11%, to 6,9823.

Asian market

Asian stock markets traded mostly higher on Wednesday, following the broadly positive cues from Wall Street overnight, as traders are digesting US Fed Chair Jerome Powell’s speech at the ECB Forum in Portugal, where he expressed satisfaction with the progress on inflation but said he wants to see more before being confident enough to start cutting interest rates.

Australian shares traded modestly higher on Wednesday, recouping some of the losses in the previous two sessions, with the benchmark S&P/ASX 200 staying above the 7,700 level, following the broadly positive cues from Wall Street overnight, with gains in technology and mining stocks.

Japan’s benchmark Nikkei 225 rose 1.3 per cent to finish at 40,580.76. South Korea’s Kospi edged up 0.5 per cent to 2,794.71. Hong Kong’s Hang Seng added 1.1 per cent to 17,956.55, while the Shanghai Composite index lost 0.4 per cent to 2,982.38.

Commodities 

Gold prices firmed on Wednesday, as investors awaited minutes of the Federal Reserve’s last policy meeting for further cues on the central bank’s interest rate cut path. The Gold Spot market closed on Wednesday with a price of $2,358.65, marking an increase of $28.99 or 1.24%

The dollar remained on the back foot after dovish comments from Fed Chair Jerome Powell. A weaker dollar makes bullion more attractive for other currency holders.

Platinum climbed 0.8% to $999.35 and palladium was flat at $1,021.

Crude oil and gasoline prices Wednesday moved higher after the dollar index fell to a 3-week low.  Crude added to its gains Wednesday after the weekly EIA report showed crude inventories fell more than expected, and US gasoline demand climbed to a 7-1/2 month high.

Forex

The U.S. dollar retreated in early European trade Wednesday after Federal Reserve Chair Jerome Powell flagged progress towards bringing down inflation, while the euro edged higher ahead of the second round of the French parliamentary vote.

EUR/USD rose 0.2% to 1.0762, with the euro remaining supported, helped by data showing the crucial services component in eurozone inflation staying stubbornly high, suggesting the European Central Bank would take its time before cutting interest rates again.

USD/JPY traded 0.2% higher to 161.81, with the pair hitting a near 38-year high, with Japanese officials largely remaining on the sidelines amid the risk of intervention.

USD/CNY edged higher to 7.2735, with the yuan falling to an eight-month low after the lowest reading since October

GBP/USD was up 0.61% to 1.28, while EUR/GBP unchanged 0.12% to 0.85.

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Last Updated on 6 months by News Desk 2