Wall St. Up on Mega-Stock Rally, Unrest Keeps European Markets on Edge
US mega-cap stocks boosted the Wall Street indicators as demand for technology and AI names rebounded sharply. The global equities market continues to swing with fluctuations in investors’ risk appetite.
An elevated energy crisis and concerns over AI spending keep investors on their toes amid growing rivalry between chip makers in the United States and the Asian tigers.
While geopolitical uncertainty remained prominent across major markets on Monday, a technology rebound lifted Wall Street and helped to lock in solid gains on the day.
Chipmakers and mega-cap stocks drove the recovery, leaving the S&P 500 0.41% higher and the NASDAQ up 1.11%, while the Dow Jones closed marginally lower.
Europe moved in the opposite direction as civil unrest intensified, with protests erupting across the region, pushing the Euro Stoxx 50 down 0.96%, a stockbroking and portfolio management subsidiary of First National Bank (FNB) said in a brief.
Weakness in banking and mining also ended the FTSE 100’s three-session winning streak, with the index falling 1.08%. Against that backdrop, the Hang Seng Index is trading 0.95% lower as technology and retail shares retreat following Monday’s holiday, while the Nikkei 225 is down 1.13%. Australia’s ASX 200 closed down 0.33%, dragged lower by materials
The Johannesburg Stock Exchange (JSE) is set for a softer open this morning as global futures offer little conviction and Asian markets are trading lower, with persistent technology concerns weighing on Hong Kong and China.
This follows a weaker domestic session, when both the All Share and Top 40 closed lower. In addition, Tencent’s 1.63% decline provides a negative read-through for Naspers and Prosus, while the 1.29% retreat in Australia’s Metals and Mining Index points to pressure on local resource counters.
Elsewhere, a softer dollar is being offset by resilient Treasury yields as investors reassess the Federal Reserve outlook. Brent crude is edging higher, platinum is firmer, and gold is broadly steady, offering modest support to PGM counters and gold miners.
The JSE closed sharply lower on Monday, with the All Share Index down 1.75% and the Top 40 down 1.90%.
Resources bore the brunt of the weakness, tumbling 3.32%, dragged down by precious metals names (-2.93%) as gold and platinum fell, as well as diversified miners – Anglo American (-5.39%) and Glencore (-5.36%) as copper prices and base metals also took a hit.
The weakness in mining heavyweights also reflected an increase in oil prices, which again fuelled inflation concerns and pushed US real yields higher, thus reducing the appeal of dollar-denominated commodities.
Industrials and Financials also plunged, declining 1.07% and 1.08%, respectively. Domestic sentiment was also subdued ahead of Wednesday’s Medium-Term Budget Policy Statement (MTBPS), with investors focused on signals around fiscal consolidation.
Several economists have highlighted the possibility of a sovereign credit rating upgrade should Finance Minister Enoch Godongwana present a credible debt-stabilisation path. European Markets Rise, U.S. Stocks Dip on AI Financing Scrutiny
