AI, Tech Rally Lifts Global Equities as European Markets Diverge
Global equities markets were broadly positive as optimism about technology and AI supported risk appetite, along with several anticipated mega-cap earnings reports.
Specifically, chipmakers drove the US advance after Broadcom (+4.00%) disclosed financing tied to Anthropic’s use of its technology, helping the S&P 500 close 0.60% higher and the NASDAQ gain 1.18%, while the Dow Jones ended flat.
Europe broadly followed the tech rebound and benefited from lower oil prices, with the Euro Stoxx 50 up 0.79%. The FTSE 100 was the exception, falling 0.75% as disappointing corporate results and a pullback among energy shares outweighed mining gains.
In Asia this morning, Japan’s Nikkei 225 is trading 1.18% higher, and the Hang Seng Index is up 0.43%, supported by strength in technology stocks, stockbroking, and portfolio management, a subsidiary of First National Bank (FNB), said in its brief.
The brief said gains are being tempered by higher US Treasury yields, a stronger US dollar and softer mainland investor buying. Australia’s ASX 200 closed flat as elevated inflation readings capped the advance
Despite a mixed backdrop in global futures, the JSE is set for a flat-to-positive open this morning, with generally positive performance across Asia providing support.
A modest gain in Tencent of 0.21% provides a positive read-through for Naspers and Prosus, while the 1.23% advance in the S&P/ASX 300 Metals and Mining Index offers a constructive signal for local resource counters.
The broader macro backdrop remains relatively fragile with the US 10-year yield edging above 5% and renewed dollar strength weighing on emerging-market currencies.
Brent crude is firmer, which may favour energy counters but raises input-cost concerns elsewhere, while softer gold and platinum prices could restrain gold miners and PGM counters.
Equities closed broadly higher on Tuesday, with the All-Share Index and Top 40 each gaining 0.63%, marking a second consecutive day of advances.
Industrials (+0.69%) led the market, supported by a 2.5% rise in Naspers, which benefited from its ongoing share buyback programme and positive sentiment toward its Tencent-linked technology exposure.
Resources also advanced 0.59%, with BHP Group up 2.36%, though weaker iron ore prices, subdued Chinese steel demand, and rising supply from Guinea’s Simandou project tempered broader mining gains.
Financials were close, gaining 0.53%. Economic data also provided encouragement, with the South African Reserve Bank’s leading business cycle indicator rising in August, suggesting a modest improvement in the economic outlook. Reflecting the constructive fiscal backdrop, South African sovereign bonds also rallied. SK Hynix Postpones Plan to Take Solidigm Public
