London (AFP) – Global stock markets diverged on Wednesday ahead of the release of crucial US inflation data that could shape the outlook for interest rates in the world’s largest economy. Asian equities struggled to claw back the previous day’s steep tech losses, while European markets advanced. London, Paris, and Frankfurt all rose in midday trading.
All eyes are on US consumer price data due later on Wednesday, which could influence the Federal Reserve’s decision on whether to hike for a second consecutive meeting on October 28. “This report is likely to be a strong one given the run-up in energy prices over September,” said Deutsche Bank’s Jim Reid. Weaker-than-expected inflation could give the Fed more room to limit further rate increases, while a stronger reading could bolster the case for tightening monetary policy.
Comments from Fed policymakers have tempered expectations of further tightening next year, with the bank’s New York boss suggesting the policy board could pause after one more hike this year. “In general, comments from the world’s most senior central bankers have been moderately dovish this week,” said Kathleen Brooks, research director at XTB trading group. She noted that policymakers in the UK and European Union had commented that second round effects of the energy price spike were not yet a problem, which “reduces the need for central banks to hike rates as aggressively as the market currently expects.”
Oil prices edged higher on Wednesday as worries swirled over the Middle East crisis, with Iran stepping up attacks in the Strait of Hormuz and Houthis pressing ahead with their strikes on oil kingpin Saudi Arabia. Investors also assessed largely upbeat earnings from Dutch chipmaking equipment giant ASML, which reported record sales and strong profits on huge demand for AI. ASML shares rose more than two percent at the opening bell on the Amsterdam stock market. The firm, a critical cog in the global economy and a bellwether for the semiconductor sector, said that demand was currently outstripping supply and said it was seeking ways to boost capacity for 2028.
Tech firms had taken a hammering on Tuesday amid concerns about China’s progress in developing AI chips and following comments by Broadcom’s boss likening the AI buying frenzy to gambling. Tokyo and Seoul, both with big tech weightings, closed lower again on Wednesday. Hong Kong and Shanghai also fell, with investors appearing unmoved by data showing China’s exports picked up pace in September and soared 36.3 percent, far more than expected.
– Key figures at around 1100 GMT –
London – FTSE 100: UP 0.4 percent at 10,690.73 points
Paris – CAC 40: UP 0.6 percent at 7,874.63
Frankfurt – DAX: UP 0.6 percent at 25,415.63
Tokyo – Nikkei 225: DOWN 0.1 percent at 67,744.29 (close)
Hong Kong – Hang Seng Index: DOWN 0.1 percent at 24,314.17 (close)
Shanghai – Composite: DOWN 0.9 percent at 3,767.23 (close)
New York – Dow: DOWN 0.4 percent at 51,670.10 (close)
West Texas Intermediate: UP 1.4 percent at $95.46 per barrel
Brent North Sea crude: UP 0.8 percent at $106.52 per barrel
Euro/dollar: DOWN at $1.1192 from $1.1200 on Tuesday
Pound/dollar: UP at $1.3263 from $1.3256
Dollar/yen: UP at 158.48 yen from 158.32 yen
Euro/pound: DOWN at 84.39 pence from 84.49 pence
© 2024 AFP
