London (AFP) – Major stock markets meandered Monday with a recovery in technology share prices petering out as quarterly earnings season kicks into gear. After a tough end to June—fuelled by worries that the valuation of companies linked to AI may have been overdone—the mood lifted last Thursday after data showed the United States created fewer jobs than expected last month. That soothed fears that the Federal Reserve could hike interest rates amid elevated inflation.
Even so, the dollar rose against its main rivals Monday, with traders awaiting minutes this week from the Fed’s policy meeting. “Investors are not walking away from the AI story, but they are asking whether a sector priced for perfection can keep delivering,” noted Patrick Munnelly, a market strategist at traders Tickmill Group. Talk is centred on when firms will see returns on the trillions of dollars invested in artificial intelligence and whether valuations have run ahead of themselves.
European markets were in cautious mode as Frankfurt barely ended in the green while London and Paris both slipped 0.3 percent at the close. New York’s main indexes were mixed, with the tech-heavy Nasdaq higher and the blue-chip Dow narrowly lower. British budget airline EasyJet saw its share price rise around 9.5 percent after saying it had agreed in principle to a takeover valued at 5.2 billion pounds ($6.7 billion) by US private equity firm Castlelake. The EasyJet board said Monday they were “minded” to accept Castlelake’s fifth proposal of £6.90 per share if a firm offer is made by August 3.
On Wall Street, the Dow was off just 0.1 percent at 52,881.12 points two hours into trading, but there was more movement on the tech-heavy Nasdaq, which rose 1.3 percent while the broad-based S&P 500 added 0.7 percent. Earlier, sentiment won a lift from Taipei-listed Hon Hai, with the maker of AI servers announcing a forecast-beating jump in second-quarter sales and predicting further growth. The firm, also known as Foxconn, has gone beyond assembling low-margin iPhones to making AI servers for Nvidia, along with electric vehicles and robots.
Also in view is the Wall Street debut of South Korean chip titan SK hynix, which sees its $29-billion listing on Friday. Elsewhere, oil prices rose a smidgin after earlier dipping, with Brent North Sea Crude adding 0.2 percent to $72.29 a barrel while West Texas Intermediate gained 0.3 percent to $68.93 a barrel despite tankers continuing to pass through the Strait of Hormuz and amid optimism over US-Iran peace talks.
However, SPI Asset Management’s Stephen Innes warned the benefits could take some time to feed through the economy. “A few more tankers moving safely through Hormuz may take the edge off the immediate panic premium, but it does not undo the cost pressures already working their way through the global economy,” Innes noted. Karsten Junius, chief economist at Bank J. Safra Sarasin, said “oil exports remain well below pre-war levels and bottlenecks are likely to persist.” Sarasin forecast oil prices settling around $75-$80 a barrel over the coming year, “keeping the inflation trajectory more elevated this year.”
– Key figures around 1545 GMT –
New York – Dow: DOWN 0.1 percent at 52,881.12 points
New York – S&P 500: UP 0.7 percent at 7,535.81
New York – Nasdaq Composite: UP 1.3 percent at 26,165.60
London – FTSE 100: DOWN 0.3 percent at 10,651.77 points (close)
Paris – CAC 40: DOWN 0.3 percent at 8,479.87 (close)
Frankfurt – DAX: UP 0.2 percent at 25,832.52 (close)
Tokyo – Nikkei 225: FLAT at 69,737.69 (close)
Seoul – Kospi: DOWN 0.5 percent at 8,051.33 (close)
Hong Kong – Hang Seng Index: UP 1.1 percent at 23,616.32 (close)
Shanghai – Composite: DOWN 0.1 percent at 4,041.24 (close)
Euro/dollar: DOWN at $1.1419 from $1.1442
Pound/dollar: UP at $1.3358 from $1.3355
Dollar/yen: UP at 162.34 yen from 161.29 yen on Friday
Euro/pound: DOWN at 85.48 pence from 85.68 pence
Brent North Sea Crude: UP 0.2 percent at $72.29 a barrel
West Texas Intermediate: UP 0.3 percent at $68.93 a barrel
© 2024 AFP
