U.S. Yields, Oil Prices Set Tone for Global Equities Markets
Elevated oil prices and multi-decade-high U.S. Treasury yields are setting a cautious tone, as Middle East uncertainty reinforces inflation concerns and expectations of further Federal Reserve tightening.
The global equities markets delivered mixed performance. In a brief, the stockbroking and portfolio management subsidiary of First National Bank (FNB) said Wall Street ended the week higher.
The S&P 500 gained 0.51%, the NASDAQ 0.48% and the Dow Jones 0.93%, as bargain hunting provided some support despite the volatile backdrop.
Europe also advanced without a specific regional catalyst, as the FTSE 100 added 0.14% and the Euro Stoxx 50 rose 0.48%. Against that backdrop, Asian trading is stronger this morning.
Hong Kong’s Hang Seng Index is currently up 0.64%, rebounding after three consecutive losses as financial, technology and energy mineral shares provide support, even as Chinese industrial profit growth moderated to 15.7%.
In early trading hours on Monday, Japan’s Nikkei 225 is up 0.02%, while the country’s 10-year yield is at a 30-year high. Australia’s ASX 200 is trading 0.11% higher, supported by utilities, industrials, and financials ahead of Tuesday’s Reserve Bank policy decision.
The Johannesburg Stock Exchange (JSE) is set for a weaker open this morning as broadly lower global futures and a sharp retreat across precious metals overshadow upbeat Asian trade.
Having closed lower in the previous session, the local market faces renewed pressure from softer offshore risk appetite and weak Chinese data, which has pushed most major commodity prices lower.
The S&P/ASX 300 Metals and Mining Index’s 1.41% decline points to pressure on JSE miners with falling gold and platinum prices likely to weigh on gold miners and PGM counters.
Tencent’s 1.19% gain nonetheless offers a positive read through for Naspers and Prosus, providing some counterweight within the large cap complex.
The JSE closed lower on Friday, with broad-based selling across all major indices. The All Share Index slipped 0.66% to close at 110 826, while the Top 40 fell 0.65% to 103 152.
Financials were the session’s worst performers, dropping 0.93% as rising global bond yields weighed on rate-sensitive bank stocks amid persistent inflation concerns linked to the Strait of Hormuz supply disruption.
Resources lost 0.53%, dragged lower by precious metals, as a weaker gold price and elevated energy costs supported expectations of higher US interest rates. Industrials proved relatively resilient, declining 0.40%. Crude Oil Prices Decline, Brent Hovers Below $106
