London (AFP) – Stock markets pushed higher on Friday as expectations for lower US interest rates continued to cheer investors. “Stock markets around the globe saw another day of strong gains on the back of Thursday’s post soft US inflation rally,” said IG analyst Axel Rudolph. US consumer inflation slowed unexpectedly in November, climbing 2.7 percent from a year ago, fuelling investor hopes that the US Federal Reserve will have room to cut rates further next year.
“Equity traders were desperate for a trigger to ‘buy the dip’ and they got it from the latest CPI release,” said Trade Nation analyst David Morrison. The data “sparked the bounce-back as traders decided that the better data would give the Fed room to cut rates sooner and further than previously forecast”. Morrison called this reasoning “complete garbage” as the data was partial in November due to the US government shutdown and completely lacked October. New York Federal Reserve President John Williams told CNBC that Thursday’s reading showing lower inflation was likely “distorted” due to data-collection problems during the government shutdown.
Equity markets, particularly on Wall Street, have come under pressure in recent weeks as concerns mount about stubborn US inflation even as the jobs market weakens. Moreover, investors have also started worrying about when, if ever, they will see returns on the colossal amounts of cash pumped into artificial intelligence. But blockbuster earnings from chip firm Micron Technology, released after the market closed on Wednesday, helped soothe nerves over a tech bubble and helped the tech-heavy Nasdaq close with a gain of 1.4 percent on Thursday. The Nasdaq gained another 1.1 percent on Friday. Shares in Micron Technology surged by 5.5 percent, after gaining more than 10 percent on Thursday. Shares in the so-called Magnificent Seven tech stocks, which include AI chip maker Nvidia and Google parent company Alphabet, gained 0.6 percent overall. “Stocks in the tech sector have been boosted by yesterday’s bumper earnings from Micron,” noted Joshua Mahony, chief market analyst at trading group Scope Markets.
– Russia cuts key interest rate –
The yen fell against the dollar on profit-taking after the Bank of Japan on Friday hiked, as expected, its own borrowing costs to a three-decade high, hours after data showed prices had held steady. Russia’s central bank said it was cutting its benchmark interest rate to 16 percent as the country’s economy sags under the financial burden of the Ukraine offensive and Western sanctions. The Bank of England cut rates Thursday, when the European Central Bank left eurozone borrowing costs unchanged. Germany’s central bank on Friday predicted a slower recovery for Europe’s biggest economy following three years of stagnation.
Shares in Oracle jumped nearly seven percent after TikTok said it had signed a joint venture deal with investors that would allow the company to maintain operations in the United States. The deal will see Oracle take a 15-percent stake in the joint venture with private equity fund Silver Lake and Abu Dhabi-based MGX, an Emirati state-owned investment fund for artificial intelligence technologies.
– Key figures at around 1630 GMT –
New York – Dow: UP 0.7 percent at 48,264.98 points
New York – S&P 500: UP 0.9 percent at 6,832.26
New York – Nasdaq Composite: UP 1.1 percent at 23,254.82
London – FTSE 100: UP 0.6 percent at 9,897.92 (close)
Paris – CAC 40: UP 0.3 percent at 8,171.30 (close)
Frankfurt – DAX: UP 0.4 percent at 24,295.95 (close)
Tokyo – Nikkei 225: UP 1.0 percent at 49,507.21 (close)
Hong Kong – Hang Seng Index: UP 0.8 percent at 25,690.53 (close)
Shanghai – Composite: UP 0.4 percent at 3,890.45 (close)
Dollar/yen: UP at 157.48 yen from 155.63 yen on Thursday
Euro/dollar: DOWN at $1.1718 from $1.1721
Pound/dollar: DOWN at $1.3374 from $1.3378
Euro/pound: DOWN at 87.61 pence from 87.62 pence
Brent North Sea Crude: UP 0.5 percent at $60.10 per barrel
West Texas Intermediate: UP 0.6 percent at $56.32 per barrel
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© 2024 AFP
