London (AFP) – European and Asian stock markets mostly rose Thursday after the latest batch of US data reinforced expectations that the Federal Reserve will cut US interest rates next week and into 2026. Wall Street rose for a second straight session Wednesday despite lingering concerns regarding high valuations in the tech sector. Bets on a December reduction for US interest rates had already surged after several Fed officials said supporting jobs was more important than keeping a lid on elevated inflation. The need for more action was further stoked by Wednesday’s data from payrolls firm ADP showing 32,000 posts were lost in November, compared with an expected rise of 10,000. The drop was the most since early 2023 and is the latest example of a stuttering American labour market.
“Right now, the data argues for additional Fed funds rate cuts,” noted Elias Haddad, markets analyst at Brown Brothers Harriman & Co. “US labor demand is weak, consumer spending is showing early signs of cracking, and upside risks to inflation are fading.” After New York’s advance, Tokyo rallied more than two percent Thursday, with Hong Kong, Sydney, Taipei, and Bangkok also finishing higher. London, Paris, and Frankfurt all rose heading into afternoon sessions. A healthy 30-year Japanese government bond sale provided some support for Tokyo’s market, as it eased tensions about a possible rate hike from the Bank of Japan this month. The news compounded a strong response to a 10-year auction earlier in the week that settled some nerves.
While market players remain confident that the Fed will continue to cut interest rates into the new year, economists at Bank of America still had a note of caution. “The most immediate source of volatility remains the US Federal Reserve,” they wrote. “While inflation has moderated and the trajectory of policy easing is intact, uncertainty around timing persists. Any delay in rate cuts could remain a source of volatility.” On currency markets, the dollar traded mixed, and the Indian rupee wallowed at record lows of more than 90 against the greenback as investors grow increasingly worried about a lack of progress in India-US trade talks.
– Key figures at around 1100 GMT –
London – FTSE 100: UP 0.1 percent at 9,703.48 points
Paris – CAC 40: UP 0.3 percent at 8,109.91
Frankfurt – DAX: UP 0.6 percent at 23,846.64
Tokyo – Nikkei 225: UP 2.3 percent at 51,028.42 (close)
Hong Kong – Hang Seng Index: UP 0.7 percent at 25,935.90 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,875.79 (close)
New York – Dow: UP 0.9 percent at 47,882.90 (close)
Euro/dollar: UP at $1.1668 from $1.1667 on Wednesday
Pound/dollar: DOWN at $1.3343 from $1.3352
Dollar/yen: DOWN at 154.76 yen from 155.23 yen
Euro/pound: UP at 87.44 pence from 87.39 pence
Brent North Sea Crude: UP 0.5 percent at $62.97 per barrel
West Texas Intermediate: UP 0.6 percent at $59.30 per barrel
© 2024 AFP
