US markets
US equities erased morning gains to seesaw lower on Thursday. Treasury yields rallied after a weak auction of 30-year bonds, while investors took a hawkish view from Federal Reserve (Fed) Chair Jerome Powell’s speech. The bellwether S&P 500 fell 0.8 percent, the blue-chip Dow Jones Industrial Average lost 0.6 percent, and the tech-heavy NASDAQ sank 0.9 percent.
In remarks prepared for an International Monetary Fund research conference, Powell acknowledged the slowing pace of inflation but reinforced the central bank’s commitment to bringing inflation back to its 2.0 percent target with sufficiently restrictive monetary policy. He signaled that further rate hikes may be needed in reducing inflation but the central bank will continue to ”move carefully”.
All the S&P sectors participated in the selloff, with health care, consumer discretionary, real estate, and utilities taking the hardest hits. On the corporate earnings front, semiconductor firm Arm Holdings tanked 5.2 percent on a downbeat third-quarter sales forecast. Tesla slid 5.4 percent after HSBC started its coverage of the electric vehicle maker with a “reduce” rating and a target price much lower than its current valuation. Conversely, entertainment giant Walt Disney jumped 6.9 percent after its quarterly profit beat estimates. Commerce platform operator Affirm surged 14.0 percent after its quarterly revenue exceeded expectations.
On the economic data front, initial claims for unemployment benefits edged lower last week. The data is in line with signals from the Fed that US labour market conditions are going through some softening, despite remaining at historically tight levels.
These price data reflect observations at market close: WTI spot crude oil rose by US$0.41 to US$76.34 while spot gold gained US$1.45 to US$1,959.85. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield rose by 12 basis points to 4.78 percent while the 10-year note yield rose by 11 basis points to 4.63 percent.
European markets
European equities extended gains on Thursday, fuelled by another round of positive corporate results. The Europe-wide STOXX and the German DAX both rose 0.8 percent, the UK FTSE 100 gained 0.7 percent, while the French CAC 40 jumped 1.1 percent.
Nearly all the Europe-wide STOXX sectors finished in positive territory, with information technology, industrials, real estate, utilities, and materials posting the biggest gains, while health care was the sole decliner. A slew of earning reports drove strong market momentum. Drugmaker AstraZeneca jumped 2.6 percent after raising its annual earnings forecast due to robust demand for cancer drugs. Energy management group Schneider Electric rallied 8.3 percent after issuing its medium and long-term outlook, while consumer goods company Henkel climbed 3.5 percent after slightly raising its annual forecasts. Digital payments processor Adyen surged 37.8 percent after reporting better-than-feared third-quarter sales and more realistic growth targets. Conversely, drugmaker Novo Nordisk fell 2.8 percent after rival Eli Lilly won approval by regulators for a weight loss drug, which cost less and introduced a strong challenge to its product Wegovy.
Asia Pacific markets
Asian markets ended mixed on Thursday. Sentiment was muted following Chinese inflation data. Meanwhile, investors cautiously awaited the US Fed Chair Powell’s speech for further clues on the direction of monetary policy.
Mainland China’s equities ended flat after bouncing between gains and losses throughout the session. The CSI 300 index and the Shanghai index both finished marginally higher. Fresh data renewed concerns over deflationary pressures in China, with consumer prices slipping back into contraction and producer prices declining further in October. However, coal stocks rebounded strongly as the main contract of coking coal continued its upward trend to hit a new high this year. Hong Kong’s equities slid for a third session in a row, with the Hang Seng index closing down 0.3 percent. In corporate news, Country Garden Holdings tumbled 9.6 percent, a day after Ping An Insurance Group Company of China refuted a report that it was planning to acquire a controlling stake in the embattled property developer.
Japanese stocks bounced back after two consecutive sessions of losses, with the Nikkei index up 1.5 percent and the broader TOPIX up 1.3 percent. Markets were boosted by a slew of robust earnings results, a weaker yen, and a rally in technology stocks. Energy stocks rose sharply after Cosmo Energy Holdings, up 0.7 percent, raised its profit forecast. Watch and calculator maker Casio Computer, gaming giant Nintendo, and cosmetics maker Kao gained between 0.7 percent and 5.6 percent following upbeat corporate updates. Gains were also notable among automakers amid the weak yen, with Honda Motor and Nissan Motor rising 2.9 percent and 3.9 percent, respectively.
Taiwan’s TAIEX settled slightly above the flatline. South Korea’s KOSPI inched up 0.2 percent. Indian equities gave back gains from the last session, with the BSE Sensex off 0.2 percent, as the rally in financial and technology stocks since the US Fed’s rate pause tapered off.
Australian shares gained for a second straight session, with the All Ordinaries index up 0.2 percent. Rate-sensitive financial stocks continued to outperform, with major banks Commonwealth Bank of Australia and ANZ Group Holdings rising 1.4 percent and 1.0 percent, respectively. Mining shares were among the other top performers amid strong iron ore prices, with major miners BHP Group and Rio Tinto up 0.6 percent each. However, technology and energy stocks declined.