Global Equities Markets Dip as US Inflation Weighs Ahead of ECB
Global equities markets dipped as the US Inflation rate surge weighed on investors’ sentiment ahead of the European Central Bank (ECB) rate decision on Thursday.
The US indices closed sharply lower, with the S&P 500 down 1.62%, the NASDAQ off 1.98%, and the Dow Jones declining 1.87%, First National Bank (FNB) said in a note on Thursday.
The bank noted that higher oil prices and a three-year high US consumer price index (CPI) reinforced expectations for further Federal Reserve tightening.
European markets reflected similar caution ahead of the European Central Bank’s impending rate decision later today, with the Euro Stoxx 50 down 0.66%, while the FTSE 100 closed 0.27% higher, buoyed by gains in property and defensive names.
In Asia-Pacific trading, the Hang Seng Index is extending its decline, currently down 1.11%, amid ongoing energy supply risks and fragile sentiment, while the Nikkei 225 is trading just above flat. Australia’s ASX 200 is down 0.13% so far.
The Johannesburg Stock Exchange (JSE) is set for a weaker open this morning as the tone across international markets remains subdued amid growing uncertainty in the Middle East and ongoing inflationary concerns.
Both global futures and Asian markets are broadly negative this morning. A 1.46% slide in Tencent signals a softer start for Naspers and Prosus.
However, a positive showing from the ASX 300 Metals and Mining Index, which is up 0.52%, bodes well for local miners with a slight overnight improvement in precious metals providing additional support. Brent crude’s climb above $94 per barrel also adds momentum to energy names.
The JSE closed sharply lower on Wednesday, with the All Share Index falling 1.38% and the Top 40 declining 1.48%, as a toxic mix of global risk-off sentiment and a weaker gold price hammered local equities.
The dominant driver of the day was the escalation of the US-Iran conflict following reports that US forces launched strikes on multiple targets in Iran for the second consecutive day.
Resources (-3.95%) bore the brunt of the selloff, dragged lower by Precious Metals Mining index (-4.76%) – AngloGold Ashanti fell 5.9% and Northam Platinum dropped 6.3%, while African Rainbow Minerals shed 8.1% to a six-month low.
Financials (-0.77%) traded in line with the broader market, while Industrials (+0.09%) remained resilient and closed somewhat flat. Zenith Bank Becomes Most Valuable Lender in Nigerian Market
