US markets
US equities extended gains from last week and finished slightly higher on Monday. Investors awaited a host of Federal Reserve (Fed) speakers, including Chair Jerome Powell, later in the week for more clues on the direction of the central bank’s monetary policy. The bellwether S&P 500 firmed 0.2 percent, the tech-heavy NASDAQ added 0.3 percent, and the blue-chip Dow Jones Industrial Average edged up 0.1 percent.
The S&P sectors ended mixed, with information technology and healthcare posting the biggest gains, while real estate and energy declined the most. Mega-cap stocks such as Apple, Microsoft, Amazon.com, and NVIDIA gained between 0.8 percent and 1.7 percent. In corporate headlines, satellite TV provider Dish Network plunged 37.4 percent after posting a surprise loss and a reduction in subscribers. The company also announced that Chief Executive Officer (CEO) Erik Carlson would step down from the role. Citigroup slipped 0.5 percent as the bank was reportedly considering job cuts. Dating app operator Bumble tanked 4.4 percent after announcing that founder Whitney Wolfe Herd would step down as CEO. Warren Buffett’s Berkshire Hathaway lost 1.5 percent even after the company reported a significant jump in operating earnings. Walt Disney, Instacart, and Biogen are scheduled to report earnings this week.
These price data reflect observations at market close: WTI spot crude oil rose by US$0.06 to US$81.42, while spot gold lost US$11.36 to US$1,984.05. The US dollar fell vs. most major currencies. The US Treasury 30-year bond yield rose by 8 basis points to 4.83 percent while the 10-year note yield rose by 10 basis points to 4.66 percent.
European markets
European equities closed lower on Monday as fresh purchasing managers’ index (PMI) readings renewed economic concerns across the region. The Europe-wide STOXX dropped 0.2 percent, the German DAX eased 0.4 percent, the UK FTSE 100 lost 0.5 percent, while the French CAC ended roughly flat.
Nearly all the Europe-wide STOXX sectors closed in negative territory, with real estate taking the hardest hit, while energy and healthcare were the rare gainers. Real estate stocks led the decline as investors seemed to take profits after shares rallied amid easing concerns over higher interest rates last week. Conversely, a rebound in oil prices drove energy shares higher, with sector majors Shell, BP, and Equinor ASA rising between 0.3 percent and 1.7 percent. Similarly, a few miners such as Anglo American and Glencore, both up 0.5 percent, tracked resource prices higher. Among other stocks, Telecom Italia sank 3.4 percent as the phone company’s board approved the sale of its fixed-line network to US private equity firm KKR, despite opposition from its leading shareholder Vivendi. Ryanair, Europe’s largest airline by passenger numbers, advanced 5.3 percent after forecasting a record annual profit and promising to pay investors a regular dividend for the first time.
On the economic data front, the PMI data showed the contraction in Eurozone business activity accelerated in October, mainly due to a deterioration in the performance of service providers. Elsewhere, German factory orders unexpectedly rose in September, supported by an increase in orders for machinery and metals.
Asia Pacific markets
Asian equities extended gains on Monday, encouraged by signs of a nearing end to monetary policy tightening by major central banks in the US and Europe.
Mainland China’s equities built on last session’s rebound as China stepped up efforts to stabilize its markets. The CSI 300 index jumped 1.4 percent, and the Shanghai index gained 0.9 percent. Gains were largely broad-based, with real estate among the top performers. Tier-2 city Zhengzhou saw a decent rebound in monthly home sales for October, indicating that the recent policy relaxation had started taking effect in certain cities. Hong Kong’s equities rose for a third session in a row, with the Hang Seng index closing up 1.7 percent.
Japanese equities ended sharply higher and extended their winning streak to a fifth straight session. The Nikkei index jumped 2.4 percent, and the broader TOPIX added 1.6 percent. Stocks tracked a rally in US markets on Friday as bond yields fell sharply after strong jobs data boosted bets of an end to the Fed’s hiking campaign. Chip-related stocks led the advance, with chip-testing equipment maker Advantest soaring 8.2 percent and chip-making equipment manufacturer Tokyo Electron jumping 2.1 percent. Automobile stocks also rose amid upbeat corporate updates after Toyota Motor and Subaru lifted their full-year earnings forecasts. Conversely, shipping and banking shares declined.
Taiwan’s TAIEX added 0.9 percent. South Korea’s KOSPI soared 5.7 percent, outperforming broader markets. On Sunday, South Korea’s financial authorities re-imposed a ban on short-selling through the first half of 2024 to promote a ‘level playing field’. Indian equities rose for a third session in a row, with the BSE Sensex up 0.9 percent, spurred by hopes that major central banks are done with their rate hikes.
Australian shares eked out modest gains, with the All Ordinaries index up 0.2 percent, rising for a fifth consecutive session. Investors looked ahead to the Reserve Bank of Australia’s policy decision on Tuesday when the central bank is expected to raise its key policy rate by 25 basis points to 4.35 percent. Financial stocks led the gains. Westpac Banking, one of Australia’s largest four banks, climbed 2.0 percent after posting a boost in annual profit and announcing a share buyback plan. Gold stocks also rose, with producer Northern Star Resources up 3.2 percent. However, energy stocks closed lower, with sector majors Woodside Energy and Santos falling 0.8 percent and 0.4 percent, respectively.