US tech shares rebounded, while European stocks cheer dovish ECB hints
US stocks rebounded on Thursday from an earlier sell-off triggered by renewed worries about stubbornly high inflation, suggesting interest rates may stay high for a while. The Nasdaq Composite rose 1.7% to close at a record due to a rally in tech shares. Amazon climbed to an all-time high, topping its prior high set in 2021. The S&P 500 rose 0.7%, shedding just 0.1% for the week. Bucking the trend, the Dow Jones Industrial Average edged down by less than 0.1%. For the week, For the week, the Dow is down 1.1% and the Nasdaq is up 1.2% so far.
In Asia, equities were mostly lower on Friday, with MSCI’s broadest index of Asia-Pacific shares outside Japan slipping 0.67% to trim its gains for the week to less than 0.2%. Japan was the only real bright spot in the region today, with the Nikkei 225 up 0.23%. Hong Kong’s Hang Seng index declined 1.9% and the Shanghai Composite index edged 0.1% lower. South Korea’s Kospi shed 0.9% after the Bank of Korea held its benchmark rate unchanged at 3.50%. Australia’s S&P/ASX 200 lost 0.3%.
Despite mostly downbeat sentiment in Asia, European stocks opened higher on Friday. The pan-European Stoxx 600 was up more than 1% in early deals, with all sectors in positive territory. On Thursday, the ECB held interest rates steady, as expected, but gave a clear signal of an upcoming rate cut. In his recent comments, ECB’s Muller said slower inflation rises the chances of a June rate cut. On the data front, Britain’s economic output increased by 0.1% in February, in line with estimates.
In currencies, the US dollar extends its ascent, refreshing November highs after stronger-than-expected inflation data made traders rethink their expectations of a June rate cut by the Fed. The USD index climbed to the 105.70 zone in recent trading, rallying for the third session in a row. Should the greenback stay above 105.50 in the near term, the 106.00 level will come into the market focus next. On the downside, the dollar needs to hold above 105.30 in order to stay afloat.