London (AFP) – Equities jumped Thursday thanks to gains in tech stocks and as weak US jobs data fanned optimism for more interest rate cuts, outweighing concerns over a partial government shutdown. Wall Street opened mostly higher with both the S&P 500 and Nasdaq Composite pushing higher from record closes. In Europe, both Paris and Frankfurt stock markets jumped more than one percent, with automakers also rallying. London dipped.
Tech stocks surged as South Korea’s biggest chip firms agreed to supply chips and other equipment to OpenAI’s Stargate project for AI infrastructure. South Korea’s Kospi index climbed 2.7 percent to a record high, thanks to Samsung and SK hynix shares soaring to one-year highs after the firms signed a preliminary deal with the ChatGPT developer OpenAI. Tokyo rose, as did Hong Kong’s tech-heavy Hang Seng index. Shanghai was closed for a week-long holiday. Taipei’s stock index jumped 1.5 percent as chip titan and market heavyweight TSMC piled on three percent.
Europe’s tech companies also rose, with ASML up five percent, and STMicroelectronics and Schneider Electric adding more than two percent. Shares in leading AI chipmaker Nvidia rose 1.7 percent at the start of trading in New York. Tech companies have been at the forefront of a surge across markets this year as investors pile into all things linked to artificial intelligence, with hundreds of billions being pumped into the sector. The valuation of OpenAI has soared to $500 billion in a private sale, making it the world’s most valuable startup, according to financial media reports Thursday.
Investors also focused on the outlook for more Federal Reserve rate cuts, which overshadowed the closure of some US departments owing to a standoff between lawmakers in Washington. Figures from payrolls firm ADP on Wednesday showed the US private sector shed jobs in September, despite expectations of employment growth. “The data emboldens calls for the Fed to ease (rates) in the months ahead,” said Joshua Mahony, chief market analyst at Scope Markets. The data was the latest in a string of below-par reports indicating the labour market in the world’s top economy continues to slow.
Observers said the reading had a little more significance owing to expectations that crucial non-farm payrolls statistics will not be released as usual on Friday owing to the shutdown. “There is a risk now for market participants of a rolling data blackout that could see increased volatility,” said Neil Wilson, UK investor strategist at Saxo. The lack of data could also affect the Fed’s deliberations, warned Trade Nation analyst David Morrison. “It could also mean that the central bank holds off from cutting this month if FOMC members feel they have a lack of clarity, given the missing data releases,” he said.
Data shows investors currently believe there is nearly a 99 percent chance that the Fed will cut rates at its meeting later this month, and a nearly 87 percent chance at the following meeting in December. In company news, UK supermarket Tesco climbed more than four percent in London after it lifted its profit guidance for its 2025/2026 financial year thanks to a competitive pricing strategy. Shares in Tesla climbed 1.6 percent after the electric car manufacturer said sales rose seven percent in the third quarter.
– Key figures at around 1330 GMT –
New York – Dow: FLAT at 46,427.56 points
New York – S&P 500: UP 0.2 percent at 6,725.39
New York – Nasdaq Composite: UP 0.6 percent at 22,889.14
London – FTSE 100: DOWN less than at 9,439.18
Paris – CAC 40: UP 1.4 percent at 8,081.64
Frankfurt – DAX: UP 1.5 percent at 24,482.73
Tokyo – Nikkei 225: UP 0.9 percent at 44,936.73 (close)
Hong Kong – Hang Seng Index: UP 1.6 percent at 27,287.12 (close)
Shanghai – Composite: Closed for a holiday
Euro/dollar: UP at $1.1739 from $1.1728 on Wednesday
Pound/dollar: DOWN at $1.3458 from $1.3476
Dollar/yen: DOWN at 147.13 yen from 147.14 yen
Euro/pound: UP at 87.24 pence from 87.04 pence
West Texas Intermediate: DOWN 0.9 percent at $61.21 per barrel
Brent North Sea Crude: DOWN 0.9 percent at $64.81 per barrel
© 2024 AFP
