(Reuters) — The stock market closed the week with mixed results, as investors digested news of record highs in the US and Europe fueled by central bank easing and Chinese stimulus. The Japanese yen saw gains following the outcome of the Japanese election.
Top Stories on Reuters
Europe’s Stoxx 600 index saw a slight increase, heading towards its strongest weekly performance since mid-August after China’s commitment to economic support boosted luxury and mining stocks. US futures dipped slightly after the S&P 500 achieved its 42nd record close of the year. The dollar and 10-year US Treasury yields remained steady.
Ongoing announcements from China regarding its stimulus package, combined with expectations for further interest rate cuts by the Federal Reserve, have increased risk appetite in the markets. Traders are eagerly awaiting the Fed’s preferred inflation gauge and consumer spending data, which could provide more insight into future rate decisions following strong revised data released on Thursday.
The Japanese yen strengthened against the dollar as Shigeru Ishiba emerged victorious in the leadership race for Japan’s ruling party. Ishiba, a seasoned party member with experience in various senior positions including defense minister, is seen as supportive of the Bank of Japan’s gradual rate hike plan. He defeated opponent Sanae Takaichi, who recently criticized raising rates at this time.
In China, the CSI 300 Index surged by 4.5%, marking its best week since 2008. The People’s Bank of China launched a bold stimulus campaign, implementing strong measures to boost the slowing economy and investor confidence.
The Shanghai Stock Exchange experienced technical difficulties, with brokerages reporting order processing delays as stock turnover hit 710 billion yuan ($101 billion) within the first hour of trading on Friday. Copper prices rose above $10,000 per ton, while iron ore surpassed $100 per ton.
Urgent Measures
By convening the politburo meeting in September instead of December, Chinese leaders indicated a willingness to take immediate action to achieve the 5% growth target, analysts at ING Groep NV noted. They anticipate further policy initiatives following the aggressive moves by the PBOC this week.
Further developments in the commodities market saw oil prices stabilizing after a sharp decline, driven by expectations of increased supply from OPEC members Saudi Arabia and Libya.
Gold prices were on track for a third consecutive weekly gain after reaching record highs, as optimism grew that the Fed would continue its aggressive rate cuts.
Key events for the upcoming week:
- Eurozone consumer confidence report on Friday
- US PCE and University of Michigan consumer sentiment data on Friday
Market Highlights:
— Reporting by Winnie Hsu
Top Stories on Reuters Business
©2024 Reuters All Rights Reserved