Stocks regain ground, dollar maintains strength

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NEW YORK/LONDON (Businesshala) – Global stock markets continued to gain ground again on Thursday and the dollar neared a one-year high on rising hopes the US Federal Reserve would tighten policy in the coming months.

FILE PHOTO: The offices of the London Stock Exchange Group can be seen in the City of London on December 29, 2017. Businesshala/Toby Melville

Earlier in the week, global stock markets suffered the worst since January. A huge sell-off in tech stocks on Tuesday sent Wall Street into its biggest drop since mid-July.

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Stock indices in the United States made a partial correction on Wednesday and continued to rise on Thursday.

The Dow Jones Industrial Average rose 51.85 points, or 0.15%, to 34,442.57, the S&P 500 rose 16.71 points, or 0.38%, to 4,376.17, and the Nasdaq Composite rose 98.06 points, or 0.68%, to 14,610.50.

The worldwide gauge of MSCI shares rose 0.29%.

Federal Reserve Chairman Jerome Powell said Wednesday that resolving “tensions” amid high inflation and still-rising unemployment is the most urgent issue facing the Fed, acknowledging that the U.S. central bank’s stable prices and full employment will be the key. The two goals are in potential conflict.

Inflation likely helped the greenback end the quarter on a positive note, and it closed near a one-year high on Thursday.

“In currency markets, the expectation is the Fed will be tough, and the dollar is a safe asset,” said Sebastian Galli, senior macro strategist at Nordea Asset Management.

The dollar index fell 0.055% to the euro, down 0.03% to $1.1591.

There was little change in yields on 10-year Treasury notes, which rose sharply earlier this week.

The price of benchmark 10-year notes fell 1/32 to 1.541% from 1.539% late Wednesday.

Pan-European STOXX 600 Index up 0.07%

Electricity prices in France are expected to rise about 12% by February, French Environment Minister Barbara Pompilly said on Thursday, highlighting inflationary pressures across Europe.

French inflation hit a nearly 10-year high of 2.7% in September, official numbers show, slightly lower than forecast. Italy’s annual inflation rate rose to 3.0%.

“This is not a broad-based inflation spiral,” analysts at Oxford Economics wrote in a note, although they noted that there was little relief in sight for record high energy prices in the coming months, with the severity of this winter being a significant factor. . “

Germany’s 10-year government bond yield was little changed at -0.208%.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.24% after several days of losses, but was still set for a 4.5% monthly decline and a 9.3% loss in the quarter.

It will be the benchmark’s worst quarter since the first three months of 2020, as COVID-19 raged across Southeast Asia and investors worried about slowing global growth, with China a particular concern.

China’s economy has been hit by regulatory restrictions in the tech and asset sectors and is now facing power shortages.

China’s factory activity unexpectedly shrank in September, data published Thursday showed, but services expanded as the COVID-19 outbreak subsided.

However, analysts say the slow growth rate will put pressure on officials to relax the policy. This provided some relief to Chinese markets, with blue chips up 0.67%.

Meanwhile, shares of troubled developer China Evergrande were down 3.9%.

The company missed paying bond interest due on Wednesday, two bondholders said, missing its second offshore loan payment in a week, though the cash-strapped company made partial payments to some of its onshore investors.

Nikkei lost 0.31% a day after Japan’s ruling party elected soft-spoken consensus-maker Fumio Kishida as its new leader and the country’s new prime minister.

Oil prices declined amid rising US crude inventories and a stronger dollar.

US crude was recently down 1.86% at $73.44 a barrel and Brent at $77.76, down 1.12% on the day.

Spot gold rose 0.7% to $1,738.45 an ounce. US gold futures rose 1.01% to $1,738.90 an ounce.

Additional reporting in Hong Kong by Alun John; Editing by Elaine Hardcastle, Chizu Nomiyama and Jonathan Otis

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