London (AFP) – Stock markets fluctuated Monday as investors looked ahead to key US inflation data later in the week for clues on the next interest-rate move by the Federal Reserve. Frankfurt and Paris indices dropped in early afternoon deals, while London traded flat. In Asia, Shanghai and Tokyo closed higher, and Hong Kong dropped. Elsewhere, the dollar fell against major rivals and the price of gold hit a fresh high.
“The big market moving announcement is likely to be the US PCE inflation report” Friday, noted AJ Bell investment director Russ Mould. The personal consumption expenditures price index is the Fed’s preferred measure of inflation. On the heels of recent economic reports showing weaker US jobs growth, the Fed last week lowered borrowing costs by 25 basis points, its first reduction this year.
Global equities have enjoyed a healthy run-up in recent months on optimism that the US central bank will lower borrowing costs several times before the end of 2025, as worries over a softening labor market trump stubbornly high inflation. This has weighed on the dollar, in turn supporting gold. “As the world’s oldest inflation hedge and with the Fed poised to embark on another monetary policy loosening cycle, gold is likely to remain well supported in the coming months,” Kathleen Brooks, research director at XTB trading group, said Monday.
As the new trading week kicked off, investors took some heart from talks between US President Donald Trump and Chinese leader Xi Jinping on Friday. Trump said progress was made “on many very important issues,” including a deal to sell the blockbuster social media app TikTok. The United States has forcefully sought to take TikTok, the social media platform hugely popular with young Americans that Trump has also used to garner support, out of Chinese hands. He added that the pair would meet on the sidelines of an Asia-Pacific Economic Cooperation summit in South Korea at the end of next month and that he would travel to China next year.
“While lacking apparent substance… (the meeting) does look to have helped create a positive atmosphere to enable extension of the ongoing US-China detente,” said National Australia Bank’s Ray Attrill. Tokyo’s stock market was the standout performer Monday, after the Bank of Japan calmed markets by saying it would sell its huge stock of exchange-traded funds gradually. The move eased fears sparked Friday by news of the plan to offload the ETFs as part of a shift away from its loose monetary policy.
Mumbai edged down as India’s $283-billion tech sector took a hit after Trump on Friday ordered an annual $100,000 fee be added to new H-1B skilled worker visas, creating potentially major repercussions for the tech industry where such permits are prolific. In company news Monday, shares in German automakers suffered after Porsche said it would dramatically slow its shift to electric vehicles amid weak demand, prompting parent company Volkswagen to warn of a multibillion-euro hit. The news, which came Friday evening, triggered shares in Porsche and VW to fall around eight percent at the start of the week.
– Key figures at around 1045 GMT –
London – FTSE 100: FLAT at 9,220.32 points
Paris – CAC 40: DOWN 0.3 percent at 7,831.63
Frankfurt – DAX: DOWN 0.7 percent at 23,480.97
Tokyo – Nikkei 225: UP 1.0 percent at 45,493.66 (close)
Hong Kong – Hang Seng Index: DOWN 0.8 percent at 26,344.14 (close)
Shanghai – Composite: UP 0.2 percent at 3,828.58 (close)
New York – Dow: UP 0.4 percent at 46,315.27 (close)
Euro/dollar: UP at $1.1777 from $1.1745 on Friday
Pound/dollar: UP at $1.3501 from $1.3472
Dollar/yen: DOWN at 147.88 yen from 147.90 yen
Euro/pound: UP at 87.24 pence from 87.18 pence
West Texas Intermediate: DOWN 0.5 percent at $62.09 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $66.36 per barrel
© 2024 AFP
