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Global market update: APAC shares respond positively to US inflation news

EditorOliver Gray
Published 16/05/2024, 11:06 am
© Reuters.
- - Following a positive response on Wall Street to recent inflation data, Asia-Pacific share markets experienced a lift on Thursday.

By 11:00 am AEST (1:00 am GMT) the Australian S&P/ASX 200, South Korea's KOSPI 200, and Japan's Nikkei 225 saw increases of 1.2%, 1.3%, and 0.6% respectively.

US stock indexes reached new all-time highs after the lowest core inflation increase since April 2021 ignited hopes for Federal Reserve rate cuts in the coming year.

The Dow Jones Industrial Average rose by 349 points (or 0.9%) to 39908, the S&P 500 increased by 1.2% to 5308, and the NASDAQ Composite grew by 1.4% to 16742.

The technology sector once again led the way, while the real estate sector also saw a boost in anticipation of a potential easing in mortgage rates. The dollar weakened alongside Treasury yields, contributing to a surge in oil and gold prices.

However, popular "meme stocks" GameStop Corp (NYSE:GME) and AMC Entertainment Holdings Inc (NYSE:AMC) experienced some pressure as traders began to profit from the two-day rally. In commodity markets, Brent crude oil rose by 0.6% to US$82.91 a barrel, and gold increased by 0.1% to US$2,388.84.

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In the local bond markets, the yield on Australian 2 Year government bonds remained steady at 4.01%, while the 10 Year yield fell to 4.31%. US Treasury notes were down, with the 2 Year yield at 4.72% and the 10 Year yield at 4.34%.

Chinese shares closed lower, pulled down by brokerages and semiconductor stocks. However, property stocks saw an uptick following reports that the Chinese government is considering purchasing unsold housing inventories.

Markets in Hong Kong were closed for the Birthday of the Buddha public holiday.

In Japan, the Nikkei Stock Average marginally increased by 0.1% to close at 38385.73, led by the precision-instruments sector. Sony Group saw a significant 8.2% jump after CNBC reported that the company is reconsidering its bid for Paramount Global and after its 4Q net profit exceeded analysts' estimates.

Indian shares slightly declined as investors awaited key US CPI data for clues on the timeline for the Fed's rate cuts. Meanwhile, stocks in the UK rose on Wednesday, with the FTSE 100 Index adding 0.2% to 8445.80.

In Europe, the STOXX Europe 600 Index grew by 0.6% to 524.71, Germany's DAX rose by 0.8% to 18,869.36, and France's CAC 40 increased by 0.2% to 8,239.99.

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