US markets
US equities settled mixed on Monday. Caution prevailed ahead of the release of October’s consumer price index (CPI) data on Tuesday, which could shape interest rate projections. The bellwether S&P 500 dipped 0.1 percent, the tech-heavy NASDAQ slipped 0.2 percent, while the blue-chip Dow Jones Industrial Average (Dow) firmed 0.2 percent.
Late last Friday, credit rating agency Moody’s lowered its outlook on the US sovereign credit rating to ‘negative’ from ‘stable’, citing increasing fiscal deficits and a decline in debt affordability. Nonetheless, Moody’s maintained the nation’s credit rating at its highest AAA level.
The S&P sectors ended mixed, with utilities, real estate and information technology posting the biggest losses, while energy, healthcare and consumer staples held up well. Energy stocks led the gains as oil prices continued to rise. In its monthly report, the Organization of the Petroleum Exporting Countries (OPEC) slightly increased its 2023 global oil demand growth forecast, citing robust global growth trends and a healthy oil market. Medtech companies such as Davita, Insulet, Dexcom, and Abbott, rose between 1.9 percent and 6.5 percent following the release of data about the heart-protective benefits of Novo Nordisk’s weight-loss drug Wegovy. Providing much support to the Dow, plane maker Boeing rallied 4.0 percent following reports that China is considering resuming purchases of 737 Max aircraft. In other corporate news, electric vehicle (EV) maker Tesla gained 4.2 percent on news that India was planning to cut tariffs on EVs.
These price data reflect observations at market close: WTI spot crude oil rose by US$2.52 to US$78.86, while spot gold lost US$10.75 to US$1,935.95. The US dollar weakened vs. most major currencies. The US Treasury 30-year bond yield rose by 1 basis point to 4.75 percent, while the 10-year note yield remained little changed at 4.63 percent.
European markets
European equities rebounded on Monday. The Europe-wide STOXX and the German DAX each gained 0.7 percent, the French CAC added 0.6 percent, and the UK FTSE 100 climbed 0.9 percent.
Nearly all the Europe-wide STOXX sectors finished in positive territory, with energy, financials, information technology and healthcare leading the gains, while real estate was the sole decliner. Energy stocks led the gains amid higher crude oil prices, with oil giants Shell and TotalEnergies jumping 1.2 percent each. Positive corporate news lifted sentiment further, with Siemens Energy advancing 6.0 percent on news that it will present a deal for billions of euros in project-related guarantees backed by the German government on Wednesday. Mining stocks booked modest gains, supported by slight increases in base metal prices on the back of better-than-expected loan data from big metal consumer China. Major miners Glencore and Rio Tinto rose 0.8 percent each. Italian banks rallied, with Monte dei Paschi (MPS) surging 8.6 percent after Fitch and Deutsche Bank raised its ratings. Among other stocks, Novo Nordisk inched up 0.3 percent after the drugmaker presented over the weekend that the cardiovascular benefits of its popular obesity drug Wegovy are not solely due to weight loss.
Asia Pacific markets
Asian equities broadly regained ground on Monday.
Mainland China’s equities ended mixed, with the CSI 300 index edging down 0.2 percent while the Shanghai index closed up 0.3 percent. Satellite Internet stocks outperformed after domestic mobile phone giants gathered in Guangzhou to discuss the innovation and popularization of ‘Direct Satellite-to-Mobile’ technology with China Telecom last Friday. Artificial intelligence (AI)-related names rose after the Guangdong government released the implementation opinions on accelerating the establishment of a leading innovation hub for the AI industry. Hong Kong’s equities snapped a four-session losing streak, with the Hang Seng index up 1.3 percent, outperforming regional peers. Sentiment improved ahead of a meeting between Chinese President Xi Jinping and US President Joe Biden later this week. It is their first engagement in a year, as the world’s two largest economies look to narrow differences on many issues. E-commerce giants Alibaba Group Holding and JD.Com jumped 1.6 percent and 1.8 percent, respectively, after reporting increased sales during the past “Double 11” shopping festival.
Japanese stocks ended around the flatline as investors took some profits following a sharp rise in the morning session. The Nikkei index inched up 0.1 percent, while the broader TOPIX was roughly flat. Technology stocks tracked the strong rally in the US markets on Friday as Treasury yields calmed. Chip-making equipment maker Tokyo Electron added 1.7 percent, and chip-testing making equipment maker Advantest gained 1.5 percent. However, gains were limited due to caution ahead of the release of the US CPI data on Tuesday. On the earnings front, major beverage maker Asahi Group Holdings climbed 3.6 percent after posting sales and profit growth in the January-September period, partly due to price hikes and recovering demand for alcoholic beverages. Conversely, cosmetics maker Shiseido slumped 14.3 percent after lowering its annual profit forecast.
Taiwan’s TAIEX added 0.9 percent. South Korea’s KOSPI edged down 0.2 percent. Indian BSE Sensex index ended flat amid caution ahead of the release of domestic retail inflation data, which is expected to fall to a four-month low in October. Technology and financial stocks pulled back after gains in the special one-hour ‘muhurat’ trading session on Sunday.
Australian shares extended losses from the previous session, with the All Ordinaries index closing down 0.4 percent. Market sentiment remained weak due to the Reserve Bank of Australia’s hawkish stance after warning of potential inflation risks on Friday. Investors cautiously awaited domestic wages and employment data later this week, concerned about the possibility of further rate hikes if the readings turn out to be hotter than expected. Financial stocks led the decline, with ANZ Group Holdings sliding 3.0 percent after falling short of estimated annual profit. Gold shares continued to decline as bullion prices softened against a solid US dollar, with major producer Northern Star Resources down 2.6 percent.