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Global market update: Easing yields and oil prices boost sentiment

EditorOliver Gray
Published 29/09/2023, 10:31 am
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Investing.com - Stock markets across the Asian-Pacific opened higher on Friday, mirroring the positive trend set by U.S. stocks as a rise in tech stocks facilitated a boost in equity indexes, despite the underperformance of utilities.

By 10:30am AEST (12:30am GMT) the Nikkei 225 was up 0.2% and the S&P/ASX 200 was up by 0.6%, while Korea and China remained closed for public holidays.

During the U.S. session, the Dow Jones Industrial Average gained 0.3% while the S&P 500 and NASDAQ Composite posted gains of 0.6% and 0.8% respectively.

The recent volatility in the $25 trillion Treasury market has been a primary focus for investors. Treasury yields seemed to be stabilizing after a recent spike following the Federal Reserve's indication that rates could remain higher than expected next year, and potentially beyond, as the central bank aims to reduce inflation to its 2% annual target.

In local bond markets, yields on Australia 2-Year government bonds rose to 4.106%, and the 10 Year yield also increased to 4.494%. In contrast, yields on U.S. Treasury notes retreated, with the 2 Year yield falling to 5.07% and the 10 Year yield decreasing to 4.59%.

In the commodities market, Brent crude oil fell 1.21% to $US95.38 a barrel on Thursday, while gold dipped to US$1,865.40. Iron ore, on the other hand, rose 1.7% to $US118.55 a tonne.

Among currencies, the Australian dollar rose to 64.29 while the US Dollar Index Korean Won and Japanese Yen slipped 0.1% apiece. The Thai Baht traded flat at 36.576.

In Asia, Chinese shares closed mostly higher, supported by oil-related stocks ahead of the Golden Week holidays. However, Hong Kong shares closed lower due to concerns surrounding property developers, and Japanese stocks also ended lower due to falls in high-dividend stocks and concerns about higher borrowing costs. Indian shares surrendered early gains and closed lower, weighed down by weakness in tech and consumer stocks.

In Europe, stocks rose as investors maintained a positive outlook despite ongoing economic uncertainty. The Stoxx Europe 600, French CAC 40, and German DAX all experienced gains, with banks and miners being the biggest winners. The FTSE 100 closed slightly up, though it underperformed more positive European peers as surging gilt yields weighed on the index.

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