Wall Street Settled on Mixed Ground
Wall Street stocks ended in the mixed territory on Thursday. However, high-growth tech equities posted significant gains.
The Dow Jones decreased by 0.62% or 210.22 points to 33,823.45. Among its thirty equities, Caterpillar plunged by 3.55%. Dow Inc dropped by 3.13, and JPMorgan lost 2.89%. As for the stocks that gained the most, Microsoft added 1.37%, and Apple increased by 1.26%.
Meanwhile, the selective S&P 500 lost 0.04% or 1.84 points, to 4,221.86.
The Nasdaq Composite Index, listing the main technology companies, jumped by 0.87%.
Energy, financial, basic materials, and industrial sectors were the ones with the most decreases. At the same time, technology companies posted the most notable gains corresponding with the stabilization of the debt markets.
The yield on the benchmark 10-year Treasury note sank to 1.487%.
Fed Comments that Moved the Market
The Fed finished its meeting on Wednesday. Even though the central bank maintained its position that inflation spikes would be transitory, it has made higher expectations for inflation this year. And while the Fed kept its benchmark interest rate near zero, it signaled that there could be interest rate increases in 2023. On the other hand, Jerome Powell, the Fed Chairman, confirmed that the central bank has already begun discussing reducing bond purchases.
Investors were taken off guard by Powell’s announcements. However, Mike Loewengart, managing director at E-Trade, assumes that the market may be reacting to these changes as more officials expect rate hikes next year.
Investors are now keeping their eye on weekly jobless claims data. It is expected to correspond to the Federal Reserve projections about rapid economic recovery.
Wall Street futures were pointing to increases. The E-Mini for the S&P500 and Dow added 0.1%, and the Nasdaq increased by 0.3%.
The country will observe a holiday on June 19, signed into law by Joe Biden to commemorate the end of slavery in the US. This holiday falls on Saturday; however, NYSE and Nasdaq rely on input from several participants, including banks, regulators, and broker-dealers.
Kospi Rebounded on Hopes of Economic Recovery
Kospi rose by 0.09% or 2.97 points to 3,267.93 in a session that moved 17.1 trillion won. The main index of the Seoul Stock Exchange was encouraged by the economic recovery. Besides, fears from the Fed meeting subsided.
Earlier trading was influenced by the First Deputy Finance Minister’s statement that the government would not lower its vigilance on the financial market situation. He added that rising inflation concerns and the possibility of an easy pullback in monetary policy by major economies could sharply increase market volatility.
The Kosdaq technology stock index added 1.21% or 12.16 points to 1,015.88.
The technological Samsung Electronics declined by 0.49%, and the country’s second chip maker, SK Hynix, lost 1.58%.
Battery maker Samsung SDI added 3.69%. Meanwhile, Naver, the main Internet operator, advanced by 2.18% to 398,000 won. Its rival Kakao rose by 4.73% to 155,000 won.
Hyundai Motor, South Korea’s leading vehicle producer, fell by 0.63%, and chemical industry leader LG Chem slipped by 1.56%.
Park Sang-Hyun, HI Investment & Securities analyst, stated that expectations of economic normalization encouraged the Kospi’s gain.
Trading volume amounted to 17.1 trillion won (US$15.1 billion).
Indian Stock Indices Settled with Losses
Even though Sensex, a benchmark index of India’s BSE, managed to recover from its day’s low of 52,040, it still traded in negative territory.
At the end of the trading session, the S&P BSE Sensex declined by 0.34 or 179 points to finish at 52,323.
On the NSE, the Nifty50 index broke below its immediate support of 15,650 and dropped as low as 15,616. Despite its recovery at the end, the index settled with a decrease of 0.48% or 76 points to 15,691.
Stocks of Indian Oil Corporation Ltd. ended with a 2.09% decrease from its previous close.
InterGlobe Aviation Ltd dropped by 1.24%. Meanwhile, Indus Towers Ltd reduced its value by 1.72%.
European Shares Point to Declines
At the beginning of the final session of the week, European stocks pointed to declines.
The Pan-European Stoxx 600 traded flat, weighed by mining stocks, following a drop in commodity prices. The mining index slid by 0.1%.
Despite the recent record gains of STOXX 600, supported by ECB keeping its monetary policy loose, Fed’s unexpected signals about tapering have depressed demand for risky assets.
Insurers, banks, and energy stocks were the ones hit the most in early European trading.
The producer Price Index in Germany increased by 1.5% in May compared to April.
Danish pharmaceutical company Orphazyme slumped by 75.1% after stating it had failed to win support from the US Food and Drug Administration for its experimental drug called Arimoclomol.
UK retail Sales Disappointed the Stock Market
As for the UK, retail sales experienced an unexpected drop of 1.4% in May against projections of 1.5%-1.6%. As a result, The UK’s benchmark FTSE 100 index slipped by 0.25% to 7,135.50.
Shares of Inchcape, a British multinational automotive distribution, advanced by 6.6%. According to the company, full-year pre-tax profit is set to be significantly ahead of the market expectation of £216m after a better-than-expected performance in the first half.
UK’s supermarket giant, Tesco’s, shares plunged after lifting pandemic-induced restrictions.
On the other hand, Kerry, an Irish public food company, boosted its shares after selling its meals business in the UK and Ireland.
Asian Shares Traded Almost Flat
Asian shares stretched their losses, and the dollar increased to almost two-month highs on Friday.
MSCI’s index of Asia-pacific shares outside Japan added a slight 0.01%.
Hang Seng, the main index of the Hong Kong Stock Exchange, advanced by 0.53%. Chinese blue-chip stocks wavered between gains and losses, eventually settling almost unchanged, with losses of 0.1%, at 5,102.47.
Meanwhile, the Shanghai Composite index also closed flat at 3,525.10.
Seoul’s KOSPI added 0.16%.
James McGlew, executive director at Argonaut, stated that inflation is increasing, pushing interest rates high in the short and medium term.
Japan’s Nikkei plummeted by 0.19%
Nikkei, the leading index of the Tokyo Stock Exchange, decreased by 0.19% or 54.25 points, to 28,964.08.
Japan’s economy has been recovering, but it is still in a critical condition caused by the coronavirus outbreak. Therefore, the central bank of Japan has not changed its ultra-lax monetary policy but extended it until March 2022.
The Topix, including the highest capitalization companies, yielded 0.87% or 17.01 points, to 1,946.56.
Toyota posted a drop of 3.88%. Meanwhile, NYK Line yielded 7.69%. As a result, Softbank shares declined by 0.79%. At the same time, Nintendo gained 2.03%.
- Wall Street shares ended in a mixed territory with Dow Jones yielding 0.62%, S&P 500 losing 0.04%, and the Nasdaq adding 0.87%.
- Asian shares traded almost flat, with the MSCI AC Asia Index adding a slight 0.01%. Hang Seng added 0.53% while Chinese blue-chip stocks dropped by 0.1%. The Shanghai Composite index closed flat.
- Nikkei plummeted by 0.19%.
- European shares point to declines; Stoxx 600 is trading flat; FTSE 100 down by 0.25%.
- The Indian stock market, Sensex contracted by 0.34% while Nifty ended with a loss of 0.48%.
- Kospi rebounded by 0.09% in hopes of economic recovery.