Global stocks posted gains after easing worries
Japanese shares increased on Monday and closed at a one-month high. It resulted from declining concern about US monetary stimulus tapering in the short term. As a result, the Nikkei Stock Exchange Average advanced by 0.74 or 213.07 points to 29,161.80. It has been the highest increase since May 10.
The rise came as Wall Street closed modestly higher on Friday. Hiroshi Watanabe, a senior economist at Sony Financial Holdings, stated that Japanese shares are still following global stocks. However, things could improve after speeding up vaccinations since the county hopes to have 60% of the population vaccinated by August.
Marine transportation, rubber products, and metals led the gains.
Nippon Yusen increased by 2.3%. As for tire markets, Bridgestone added 1.3%, and Yokohama Rubber surged by 2.9%.
Growth-led equities outperformed today
Boosting of the US shares supported the growth-oriented stocks, which outperformed today.
MP3 increased by 4.5%. At the same time, Fanuc advanced by 3.2%. Keyence Corporation, the manufacturer of sensors and vision systems, raised by 2.72%, and the technological Softbank increased by 0.70%.
Kobe Bussan, Japan-based food production, and distribution company shares, grew by 11.1%.
As for the internet-sensitive banking sector, it has dropped after US treasury yields posted their most significant weekly decreases.
MUFG lost 1.0%, and Mizuho Financial Group decreased by 0.9%.
Game company Gumi plunged by 15.8%. It followed an announcement of resignation by its founder, who still owns more than 10% of the company.
Fast Retailing, the owner of Uniqlo, added 2.27%. Meanwhile, electrical components shares enjoyed 2.22%.
On the contrary, N8intendo, the video game developer and distributor, decreased its values by 3.08%.
In the first section of the trading, 1,153 companies experienced a rise. Meanwhile, 901 shares plunged, and 139 closed unchanged.
The trading volume of the session amounted to 1.9 trillion yen.
The Kospi gains 0.09 ahead of the Fed’s monthly meeting
The Kospi, the main index of the Korean stock exchange, increased by 0.09% this Monday. Investors opted for moderation while waiting for the monthly meeting of the Fed.
The Kospi advanced by 2.81 points to 2,252 to reach a new all-time high.
Meanwhile, the Kosdaq technology stock index added 0.63% or 6.28 points and settled at 997.41 units.
The South Korean Market fluctuated moderately throughout the day. Investors chose to ensure profits and not embark on risky operations. They hope to see some clues about the becoming the largest economy in the world after the Federal Reserve meeting on Wednesday.
Despite the better performance of the technology sector thanks to favorable export data for the country due to the strong demand for semiconductors, Samsung Electronics dropped by 0.62%. SK. Hynix, another largest semiconductor in the country, declined by 0.78%.
Hyundai Motor, South Korea’s leading automaker, lost 0.21% on the same day it announced a temporary suspension of operations. LG Chem, the chemical company, declined by 2.71%.
Wall Street closed mixed, and S&P 500 marked another record
Wall Street shares finished a volatile week on a mixed ground last week.
The selective S&P 500 marked its second consecutive record after a rough day. It increased by 0.19% or 8.26 points, to 4,247.44. At the same time, the Dow Jones advanced by 0.04% or 13.36 points, to 34,479.60.
The Nasdaq Composite Index, listing the main technology companies, added 0.35% or 49.09 points, to 14,069.
By sectors, gains were led by financial co0mpanies, technology, and non-essential goods sectors. Meanwhile, the health sector has experienced the most losses.
On the first section of the trading day, Wall Street traded in the mixed ground. However, it rallied in the last few minutes.
Experts believe that the price increase will be transitory
As the Federal Reserve has insisted, inflation will be transitory, and experts believe that even the supply shortage could be temporary. They expect companies to increase productivity and begin to adjust to increased demand.
Brian Belski, a chief investment strategist at BMO Capital Markets, believes that the sharp uptick in prices can not be translated into an extended period of raised inflation.
Investors reacted positively to the data on the recovery of the US labor market. Applications for unemployment benefits registered the lowest weekly number in the last 15 months.
Among the 30 Dow Jones stocks, the most significant rises were made by American Express, which added 1.40%. Goldman Sachs followed it with a 1.11% gain. Meanwhile, McDonald’s gained 1% and Apple advanced by 0.98%.
The most significant losses were registered by Caterpillar, with a drop of 2.20%. Johnson & Johnson decreased by 1.24%, and UnitedHealth yielded 0.90%.
As for the “meme” stocks outside of the group, Clover raised by 4.81%, AMC advanced by 15%, and Gamestop added 6%.
The treasury market seemed to agree with the outlook for temporary inflation. The US 10-year Treasury bond yield dropped by 1.43%, to a low not seen in 10 months.
US stock futures started the week with increases
US stock futures posted slight gains on Monday after ending last week at an all-time high. The S&P 500 gained less than 0.1%.
On the other hand, the energy company’s shares increase led to the surge in European equities.
Salman Baig, a multi-asset investment manager at Unigestion, believes that there are still more upside prospects in the stock market.
Even though the investors believe the Federal Reserve will reaffirm the pace of bond purchases, there is anxiety about the central bank’s plans to scale back monthly stimulus injection withdrawal. The Fed’s forecasts for interest rates, economic recovery, and inflation could move the markets. According to Jim Paulsen, a chief investment strategist at the Leuthold Group, any evidence suggesting monetary policy tightening is proceeding will likely bring volatility to the equity market.