Chinese markets suffer solid losses, while US indexes at fresh record highs
All three major US stock indexes registered new record closes for the second day in a row on Thursday to mark the fourth straight winning session. The buying pressure was driven by optimism from the Fed’s expectation for three rate cuts this year even after a couple of stronger-than-expected inflation reports. The Dow Jones closed up 0.7%, the S&P 500 index advanced 0.3%, and the Nasdaq Composite added 0.2%. For the week, the S&P 500 so far adds 2.4% and the Nasdaq is rising nearly 2.7%, while the Dow is almost 2.8% higher and on pace for its best week since late-last year.
Asian equity markets were mostly lower on Friday with Chinese markets leading losses amid reports of a new US bill that will limit investment in Chinese stocks by US mutual fund firms. China’s Shanghai Composite indexes slid 0.95% during the session, while losses in technology stocks dragged Hong Kong’s Hang Seng index down more than 2%. Japan’s Nikkei 225 index gained 0.15% after adding more than 1% earlier in the session after the data showed that Japanese consumer price index grew sharply in February.
In Europe, stocks were mixed in early trading on Friday after rallying to all-time highs in the previous session. The pan-European Stoxx 600 was unchanged in early deals, with volatility ebbing after a flurry of interest rate decisions in recent days. The Swiss National Bank surprised markets on Thursday by lowering its key policy rate by 0.25 percentage points to 1.5%. The Bank of England held interest rates as expected during the meeting yesterday. On the data front, the headline German IFO Business Climate Index came in at 87.8 in March, much above the market consensus of 86.0.
Elsewhere, the US dollar has been rallying since yesterday, clinging to one-month highs ahead of the weekend. After a short-lived sell-off in a knee-jerk reaction to the Fed’s relatively dovish message, the USD index resumed the ascent to settle above the 104.00 figure. The greenback extended gains to 104.43, with the 104.50 resistance zone in focus at this stage. On the downside, the 104.00 mark represents the immediate significant support, followed by 103.80.