LONDON: Asian and European stocks climbed Wednesday, with several key equity markets reopening after a festive break, as investors bet on the US Federal Reserve cutting interest rates as early as March.
Markets in Japan, Australia and Hong Kong all finished higher, with bourses in the latter two reopening after the Christmas trading break.
London led the way among major European stock markets as trading on its benchmark FTSE 100 index resumed for the first time since Friday.
“Global stock markets seem to be headed for an end-of-year ‘Santa rally’ as traders and investors return to their desks after the Christmas break, gearing up for the final push into 2024,” noted Walid Koudmani, chief market analyst at XTB trading group.
European shares end slightly higher ahead of holiday
“The ongoing optimism surrounding the prospect of central banks initiating interest rate reductions in 2024, with multiple cuts expected next year, continues to propel shares higher.”
Market sentiment has been largely positive since the Fed’s most recent monetary policy meeting, when it indicated the rate-hike cycle could be nearing its end as global inflation slows.
Global markets were also positively affected by the so-called “Santa Claus rally”, which has historically seen stocks tick higher – albeit at thinner volumes – during the end-of-year holiday period.
Tokyo’s stock market closed up more than one percent Wednesday, with investors continuing to react to signals from the Bank of Japan that it may reverse its ultra-loose monetary policy which has seen it avoid rate hikes.
Wall Street rose Tuesday, with the Dow and broad-based S&P 500 both rising 0.4 percent and the tech-rich Nasdaq Composite Index climbed 0.5 percent.
Bucking the rising trend, however, was Apple, whose share price dipped after a US ban on some of its smartwatch models came into effect, a byproduct of a patent dispute.
The ban stems from a complaint made to the International Trade Commission in mid-2021 accusing Apple of infringing on medical device maker company Masimo Corp’s “light-based oximetry functionality”.
Elsewhere on Wednesday, oil markets reversed last week’s gains, mainly owing to fears regarding the possible regional spread of the conflict between Israel and Hamas.
Key figures around 1115 GMT
London - FTSE 100: UP 0.6 percent at 7,740.86 points
Paris - CAC 40: UP 0.2 percent at 7,583.68
Frankfurt - DAX: UP 0.2 percent at 16,738.19
EURO STOXX 50: UP 0.3 percent at 4,533.33
Tokyo - Nikkei 225: UP 1.1 percent at 33,681.24 (close)
Hong Kong - Hang Seng Index: UP 1.7 percent at 16,624.84 (close)
Shanghai - Composite: UP 0.5 percent at 2,914.61 (close)
New York - Dow: UP 0.4 percent at 37,545.33 (close)
Dollar/yen: UP at 142.59 yen from 142.34 yen on Tuesday
Euro/dollar: UP at $1.1051 from $1.1042
Pound/dollar: UP at $1.2727 from $1.2725
Euro/pound: UP at 86.82 pence from 86.77 pence
West Texas Intermediate: DOWN 0.7 percent at $75.05 per barrel
Brent North Sea crude: DOWN 0.6 percent at $80.62 per barrel
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