Global Markets Rally as Pause in Bond Selloff Restores Risk Appetite
Global equities markets rallied as a pause in the global bond sell-off restored risk appetite, easing valuation pressures on technology shares and supporting credit-sensitive sectors.
Wall Street reached fresh record highs as chipmakers rallied, with the S&P 500 closing 0.58% higher, the NASDAQ gaining 0.45% and the Dow Jones adding 0.49%, First National Bank (FNB) said in a brief on Wednesday.
Investors now await Federal Reserve minutes for further guidance on monetary policy. Lower sovereign yields also lifted European banks, consumer discretionary stocks, and carmakers, helping the Euro Stoxx 50 close up 0.48%, while the FTSE 100 gained 0.42% as consumer staples and banks advanced.
Asia-Pacific trading is more mixed. The Hang Seng Index is up 0.46%, despite higher oil prices reviving inflation and interest-rate concerns, while the Nikkei 225 is down 0.59% as the Bank of Japan’s rate outlook remains in focus.
Australia’s ASX 200 is down 0.09% so far, despite support from retail and industrial services offsetting weakness in technology and financials.
The Johannesburg Stock Exchange (JSE) is set for a softer open this morning after closing higher in the previous session, with global futures showing a mild negative bias while Asian markets trade mixed.
Investors are also awaiting the Federal Reserve minutes, with the United States (US) 10-year yield steady ahead of the release. In addition, Tencent is down 1.91%, providing a negative read-through for Naspers and Prosus.
Resource counters may also lack support due to a 0.25% fall in the S&P ASX 300 Metals and Mining Index, as weaker gold and platinum prices are likely to temper appetite for local precious metals miners and PGM counters. However, firmer Brent.
The JSE closed higher on Tuesday, reversing some recent losses as the All Share Index gained 0.51% and the Top 40 rose 0.48%, driven by strong performances from financial and industrial stocks.
Financials advanced 1.49%, and Industrials added 0.84%, while the Resources 20 lagged, declining 0.75%.
Sanlam was the standout performer, surging a further 5.48% after surging 19% in the previous session following the announcement of a firm intention to acquire the remaining minority stake in Santam, providing a significant boost to the broader insurance and financials sector.
Banks also rallied, gaining 1.40% as government bonds strengthened after the National Treasury’s weekly bond auction recorded its strongest demand since June, with a 6.3 times bid-to-cover ratio on R2.55 billion offered. #Global Markets Rally as Pause in Bond Selloff Restores Risk Appetite# Global Markets Mixed as U.S. Treasury Yields Dampen Risk Appetite
