Bank of Japan’s policy meeting is having an impact on global equities. US equity futures are trading in the green on Wednesday after Japanese stocks closed the day higher. NIKKEI 225 Index closed 2.5% higher as the Bank of Japan resisted rumors of yet another policy adjustment by retaining ultra-low interest rates and leaving its yield control policy unaltered.
In line with market expectations, the UK’s annual inflation rate decreased to 10.5% in December 2022 from 10.7% in November. It represents the lowest rate in three months and the second straight month of declining inflation. The largest partially offsetting upward contributions came from food and non-alcoholic beverages, with the largest downward contributions coming from transportation (especially motor fuels), clothing and footwear, and recreation and culture.
Equities in London were trading near the flatline on Wednesday, with the blue-chip FTSE 100 hovering near record levels at around 7,850 points, as gains in materials and technology offset losses in energy.
This week, investors will be focussing on jobs, pay, inflation, and the earnings results of companies. As China’s reopening coincided with worries that further monetary tightening in other major economies could trigger a worldwide recession, investors also continued to examine the prognosis for the world economy. Investors are awaiting additional earnings reports for further indications of how businesses are faring in the present economic climate.
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“Adverse economic news from China and quarterly results of Morgan Stanley and Goldman Sachs weighed on the sentiments of the broader market. The market had closed higher on Friday, with US major indexes S&P 500 and Nasdaq ending the week at one-month highs. Traders would be eagerly waiting for some pivotal data this week including existing home sales, retail sales, and jobless claims for December,” says Kunal Sawhney, CEO, Kalkine Media.
More earnings reports from significant companies, including Charles Schwab, J.B. Hunt Transport Services, Prologis, PNC Financial Services, and Discover Financial, among others, are to be released today.
On Tuesday, Dow was down by 1.14%, S&P 500 up by 0.2%, Nasdaq by 0.14%. While United Airlines rose 2% on better-than-expected quarterly results, Moderna soared 5% after announcing that its respiratory syncytial virus vaccine is effective at avoiding the illness in older persons.
Australian technology stocks followed their US counterparts higher, while losses in the mining and oil sectors restrained advances. The S&P/ASX 200 Index increased 0.1% to 7,393 on Wednesday, ending at its highest level in almost eight months. Codan, Polynovo, Life360 were the top three gainers on the Australian stock exchange.
On Wednesday, the Shanghai Composite Index closed exactly at the same level of 3,224.41 as that on Tuesday. Hang Seng closed 0.32% higher than the previous day’s close.
The opening of the European equity markets on Wednesday was higher as investors ignored concerns about a possible recession and concentrated instead on a slowing rate of inflation, which raised expectations for a more gradual tightening of monetary policy.
Investors also kept an eye on the World Economic Forum, which is currently taking place in Davos, Switzerland, and at which prominent business and political figures are scheduled to speak and cover a variety of issues, including the state of the world economy. On the data front, Wednesday is expected to bring the eurozone’s final readings on inflation and construction production.
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