Global Markets Mixed on Hawkish Fed, US -Iran Unpriced Risk
Global equity markets were mixed as US-Iran tensions weighed on investor sentiment, while US Federal Reserve minutes signalled that an interest rate hike looms.
A broad advance in Asia-Pacific equity markets set the constructive overnight tone, driven by resilient risk appetite despite heightened uncertainty surrounding the US and Iran.
The Nikkei 225 gained 1.79%, and the Hang Seng Index rose 1.86%, with the latter buoyed by selective buying across technology and property names, First National Bank (FNB) said in a brief on Friday.
The ASX 200 added 0.28%, supported by a sharp rally in metals and mining stocks. US equities closed firmly higher on Thursday, with the Nasdaq up 1.30%, the S&P 500 gaining 0.81%, and the Dow Jones Industrial Average adding 0.27%, as a sharp rally in semiconductor stocks drove the advance.
Micron Technology (+4.52%) surged after announcing plans to raise spending on new US plants to $250 billion to meet artificial intelligence-driven demand, lifting the broader chip sector.
European equities diverged on Thursday, with the Euro Stoxx 50 gaining 1.28% as a rebound in semiconductor stocks and a recovery in miners drove the broader market higher.
The FTSE 100 slipped 0.16% as a 7.3% collapse in AstraZeneca following a failed late-stage heart drug trial offset broader gains and left London lagging its continental peers – investors also awaited final inflation prints from Germany and France.
Despite mixed signals from global futures, the JSE is set for a flat-to-positive open this morning, as positive momentum seen across Asia is likely to filter through to emerging markets.
The ASX 300 Metals and Mining Index surged 2.55%, which is likely to lend meaningful support to resource counters on the JSE – platinum is firmer, providing a constructive backdrop for precious metals counters.
Meanwhile, spot gold is marginally softer, tempering the outlook for gold miners. However, Tencent bucked the broader market trend, declining 1.79% in Hong Kong, a move likely to weigh on Naspers and Prosus at the open, given their substantial exposure to Tencent.
The local bourse closed firmer, in line with global markets, as gold prices rebounded and oil eased, with markets looking past the exchange of fire between the US and Iran.
From a local standpoint, the market digested softer May manufacturing production data, which showed a contraction of 4.3% y/y – worse than the consensus estimate.
The All Share index and Top 40 gained 1.05% and 1.13% at 109 489 points and 101 317 points, respectively. Resources led the charge, gaining 3.39% as the Precious Metals and Mining Index rose 3.62% – Implats (+5.54%), Northam (+3.99%) and AngloGold (+3.19%) reversed losses from previous sessions this week.
Financials (+0.59%) traded in line with the market, while Industrials (-0.34%) were weighed down by weakness in heavyweight technology names like Naspers (-3.15%) and Prosus (-2.33%), closing the session in negative territory. Global Oil Supply Rises 4.1mbpd in June as Shipments Improve -IEA
