Investors in Asian markets saw mostly positive movement on Monday as attention shifted from last week’s turbulence centered around US recession concerns to the upcoming release of crucial inflation and retail data.
Following a significant downturn due to a disappointing US jobs report, equities managed to rebound in the following days, closing out Friday on a positive note.
Positive gains were supported by a report indicating a lower-than-expected number of individuals filing for unemployment benefits, calming fears of a contracting top global economy.
All three primary indices in New York concluded Friday with gains.
In Monday’s Asian trading, markets in Hong Kong, Sydney, Seoul, Mumbai, Taipei, and Wellington moved higher, while Shanghai, Singapore, Jakarta, and Manila experienced slight declines.
London, Paris, and Frankfurt all began the day with increases.
Tokyo, however, remained closed for a holiday.
The yen weakened after last week’s fluctuations, which saw it reach a six-month high against the dollar following weak US jobs data that heightened expectations of a Federal Reserve rate cut.
The Bank of Japan’s second rate hike in 17 years, along with indications of more hikes to come, further impacted the yen’s movement.
Comments last week aimed at reassuring investors and maintaining stability amidst market volatility helped ease some uncertainties.
Analysts caution that while some calm has returned to trading floors, traders remain cautious and eagerly anticipate the release of upcoming economic indicators.
The upcoming consumer price index and retail sales reports are expected to give the Federal Reserve more flexibility in adjusting interest rates.
Market expectations foresee a 25 basis point reduction next month and at least one more by January, as recent data suggests improved price control.
Despite this, Fed officials hold differing views on rate outlooks, with Governor Michelle Bowman expressing optimism about potential inflation rebounds but remaining wary of premature rate reductions.
Meanwhile, Boston Fed chief Susan Collins indicated readiness to commence rate cuts if data shows continued inflation containment.
Market analyst Stephen Innes cautions about potential repercussions if there is a simultaneous increase in CPI and decrease in retail sales, highlighting the risk of a sharp market decline.
Key figures as of 0710 GMT include:
• Hong Kong – Hang Seng Index: UP 0.1% at 17,105.07
• Shanghai – Composite: DOWN 0.1% at 2,858.20 (close)
• London – FTSE 100: UP 0.3% at 8,196.10
• Tokyo – Nikkei 225: Closed for a holiday
• Euro/dollar: UP at $1.0923 from $1.0921 on Friday
• Pound/dollar: UP at $1.2770 from $1.2760
• Dollar/yen: UP at 147.15 yen from 146.63 yen
• Euro/pound: DOWN at 85.52 pence from 85.57 pence
• West Texas Intermediate: UP 0.6% at $77.29 per barrel
• Brent North Sea Crude: UP 0.4% at $79.96 per barrel
• New York – Dow: UP 0.1% at 39,497.54 (close)
Source: AFP