US markets
US equities were little changed on Wednesday in the absence of major market-moving catalysts. Focus remained squarely on the Federal Reserve (Fed)’s interest rate outlook, where the central bank is expected to have reached the end of its monetary tightening cycle. The bellwether S&P 500 and the tech-heavy NASDAQ firmed 0.1 percent each, while the blue-chip Dow Jones Industrial Average dropped 0.1 percent.
The S&P sectors ended mixed, with information technology and real estate advancing the most, while energy posted the largest losses as oil prices extended their recent slide. Among individual stocks, Eli Lilly climbed 3.2 percent after the US Food and Drug Administration approved the drugmaker’s weight loss treatment. On the earnings front, Take-Two Interactive Software climbed 5.2 percent after announcing plans to release a trailer early next month for the latest installment in its best-selling ‘Grand Theft Auto’ video game franchise. Conversely, Warner Bros Discovery tumbled 19.0 percent as losses widened and the media and entertainment conglomerate warned that Hollywood strikes and a weak advertising market could hurt 2024 earnings. Peer Paramount Global also sank 7.9 percent. Electric vehicle maker Lucid Group tumbled 8.1 percent after cutting its production forecast.
These price data reflect observations at market close: WTI spot crude oil fell by US$2.04 to US$75.93 while spot gold lost US$5.45 to US$1,958.40. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield dropped by 8 basis points to 4.66 percent while the 10-year note yield dropped by 5 basis points to 4.52 percent.
European markets
European equities edged up on Wednesday, buoyed by a rally in health care stocks and positive corporate reports. However, investors remained cautious about the interest rate outlook as they analysed a batch of economic data and remarks from central bank officials. The Europe-wide STOXX index rose 0.3 percent, the German DAX gained 0.5 percent, the French CAC added 0.7 percent, and the UK FTSE 100 slid 0.1 percent.
A majority of the Europe-wide STOXX sectors closed in positive territory, with consumer discretionary, healthcare, and industrials posting the biggest gains. On the other hand, utilities, real estate, and energy declined. Retail stocks led the gains, with Marks & Spencer rallying 8.4 percent after reporting a surge in first-half profit and unexpectedly declaring a dividend payout. Associated British Foods also advanced 2.5 percent following upgraded guidance for its key subsidiary Primark. Among other stocks, Germany’s Commerzbank added 0.7 percent as its net profit exceeded estimates by more than tripling in the third quarter. Conversely, utilities fell the most, with E.ON, the largest energy networks operator in Europe, sliding 0.8 percent after warning of a significant hit to fourth-quarter profit at its retail division due to price cuts.
On the economic data front, retail sales in the euro area fell slightly more than expected in September, marking the third consecutive month of decrease. Meanwhile, a survey showed median expectations for inflation in the currency bloc over the next 12 months increased sharply to 4.0 percent in September. Encouragingly, the annual consumer price inflation rate in Germany was confirmed easing significantly to 3.8 percent in October, the lowest reading in more than two years.
Asia Pacific markets
Asian markets ended mixed on Wednesday. Concerns over the global economy emerged after data on Tuesday showed a larger-than-expected drop in Chinese exports. Meanwhile, a cautious mood prevailed ahead of Fed Chair Jerome Powell’s speech later in the day.
Mainland China’s equities extended losses from the previous session, with the CSI 300 index and the Shanghai index both dropping 0.2 percent. However, interactive games continued their upward trend and led the gains. Real estate stocks rebounded amid hopes of more supportive measures as authorities met with leading property developers to understand the cashflow situation and financing demand. Autonomous driving stocks were also among the rare gainers. Shanghai has already developed multiple routes for autonomous driving and is aiming to launch designated roads and zones for testing. Hong Kong’s equities fell for a second straight session, with the Hang Seng index closing down 0.6 percent. In corporate headlines, HK-listed shares of Ping An Insurance Group Company of China slid 5.4 percent on news that Chinese authorities had asked the insurance giant to take a controlling stake in embattled property developer Country Garden, which was up 12.2 percent. However, Ping An denied that it had received such a request.
Japanese stocks fell for a second straight session, with the Nikkei index down 0.3 percent and the broader TOPIX down 1.2 percent. Energy stocks led the decline amid plunging oil prices. Oil explorer Inpex tanked 5.5 percent, and refiner Idemitsu Kosan sank 5.5 percent. Financial stocks also took a hard hit, mainly due to concerns over lower profits amid falling interest rates, with Mitsubishi UFJ Financial Group down 4.2 percent. Bucking the downward trend, growth stocks such as chip-related shares gained, with chip-testing equipment maker Advantest jumping 1.9 percent. On the corporate earnings front, Mazda Motor advanced 10.4 percent after raising its annual operating profit forecast on the back of a weak yen.
Taiwan’s TAIEX added 0.3 percent. South Korea’s KOSPI lost 0.9 percent. Indian equities regained some ground, with the BSE Sensex up 0.1 percent, supported by stronger energy stocks amid falling oil prices.
Australian shares recouped losses from the previous session, with the All Ordinaries index up 0.3 percent, mirroring overnight gains in the US markets due to a less hawkish tightening outlook. Financial stocks led the gains, with Australia’s largest four banks rising between 0.4 percent and 1.5 percent. Communication services, information technology and real estate sectors also witnessed notable gains. However, mining stocks declined on the back of falling iron ore prices, with major miners BHP Group and Rio Tinto sliding 1.9 percent and 2.0 percent, respectively.