S&P 500, Euro Stoxx 50 Rally as US Rate Hike Bets Ease
The S&P 500 rose to a record high, while European markets traded mixed, with the Stoxx 50 edging higher as US rate-hike bets eased following a softer-than-expected inflation print.
Divergent momentum across the Asia-Pacific set the tone overnight, with Japanese equities outperforming while broader regional sentiment remained under pressure, the stockbroking and portfolio management subsidiary of First National Bank (FNB) said in a brief.
The Nikkei 225 advanced 0.51%, supported by continued yen dynamics and resilient domestic data flows. The Hang Seng Index fell 0.93%, weighed by caution ahead of China’s monetary data due later today, while the ASX 200 declined 0.92% as materials and energy names came under pressure.
In the US, the S&P 500 closed at a record high on Thursday, gaining 0.65%, as back-to-back soft inflation prints, including flat July producer prices, reduced the probability of a Federal Reserve rate hike next month and drove renewed strength in technology, driven by rising hyperscaler spending plans.
This pushed the Nasdaq up 0.81%, while the Dow Jones locked in marginal gains of 0.13%. European equities closed mixed yesterday, with the Euro Stoxx 50 edging up 0.18% to a second-highest close in its history while the FTSE 100 fell 0.6%, dragged lower by a sharp drop in mining stocks.
FNB said in its morning brief that Johannesburg Stock Exchange (JSE) in South Africa is set for a flat-to-negative open this morning, as conflicting signals from overnight sessions temper directional conviction.
While global futures are offering some upside guidance, the ASX 300 Metals and Mining Index sold off aggressively and is down 2.81%, which is likely to pressure resource counters on the JSE.
Gold and platinum are softer this morning, which will likely compound any weakness among the precious metal counters on the exchange. In addition, Tencent is trading 0.18% lower in Hong Kong this morning, a marginally negative cue for Naspers and Prosus.
The local bourse extended losses for the third consecutive session on Thursday and is on track to posting a weekly loss, dragged by a sharp decline in the resources sector amid softer commodity prices.
By market close, the JSE All-Share index and Top 40 were both down 0.75% and 0.90% at 114 115 and 106 250 points, respectively.
Resources shed 3.13% amid weakness in the Precious Metals & Mining Index (-3.41%). Financials (+0.74%) bucked the trend and closed in positive territory, while Industrials closed somewhat flat.
European, US Markets Diverge as Inflation Data Shapes Rate Expectations
