Global stocks show mixed performance amid rising US dollar and election uncertainties

Global stock markets displayed a mixed trend as the US dollar strengthened and uncertainties around the US election persisted. Major indices in Asia and Europe showed varied performances, with notable gains in Chinese markets.

Global stocks showed mixed performance on Wednesday, weighed down by a stronger US dollar and uncertainties surrounding the upcoming US elections, according to AP. European markets began the day on a downbeat note, with Germany’s DAX dipping by 0.1% to 19,414.73 and the CAC 40 in Paris losing 0.3% to 7,511.72. In contrast, Britain’s FTSE 100 edged up by 0.1% to 8,312.97. The futures for the S&P 500 were also down by 0.1%, while the Dow Jones Industrial Average futures dropped 0.3%.

Asian markets exhibited a similar pattern of mixed outcomes. Japan’s Nikkei 225 fell by 0.8%, closing at 38,104.86 as the yen weakened against the US dollar. On the other hand, Chinese markets posted gains for a second consecutive day, largely boosted by the central bank’s decision to lower its one-year and five-year Loan Prime Rates earlier in the week. Hong Kong’s Hang Seng index advanced by 1.3% to 20,760.15, while the Shanghai Composite rose by 0.5% to 3,302.80.

One of the most notable movements in Japan was Tokyo Metro Co’s stock, which surged by 45% during its trading debut. The company raised 348.6 billion yen (approximately $2.3 billion) in its initial public offering (IPO), marking Japan’s largest IPO since SoftBank Corp.’s listing in 2018.

As AP reported, the recent decision by Chinese policymakers to cut rates was supported by further measures aimed at stabilising the country's economy. State media revealed that a state-backed think tank proposed issuing 2 trillion yuan (about $281 billion) in special government bonds to create a market stabilisation fund. This initiative is intended to ease hidden debt pressures and boost investor confidence in the markets. Stephen Innes, managing partner at SPI Asset Management, commented on the developments, saying that despite this bold proposal, there is a perception that China’s authorities are playing catch-up, reacting to challenges rather than proactively getting ahead of them.

Elsewhere in the region, Australia’s S&P/ASX 200 index climbed by 0.1% to 8,216.00, while South Korea’s Kospi added 1.1%, closing at 2,599.62. However, Taiwan’s Taiex fell by 0.9%, and India’s Sensex gained 0.2%.

On Tuesday, US markets had a relatively quiet session. The S&P 500 slipped by less than 0.1%, and the Dow also saw a similar marginal decline. In contrast, the Nasdaq composite rose by 0.2%. The overall stock momentum has been affected this week by the increasing pressure from rising US Treasury yields. The 10-year Treasury yield remained steady at 4.20%, a significant jump from the 4.08% seen late last week. Rising yields typically make stocks less attractive to investors, as they tend to prefer the higher returns from bonds.

According to AP, investors are also keeping a close eye on the Federal Reserve's potential moves regarding interest rates. Many traders now anticipate the Fed may raise rates by half a percentage point more before the year ends, based on data from CME Group. This is a stark change from a month ago when some expected a rate cut by year-end.

In the commodities market, benchmark US crude dropped by 76 cents, settling at $70.98 per barrel. Similarly, Brent crude, the international standard, also fell by 76 cents, trading at $75.28 per barrel. The US dollar strengthened against the Japanese yen, rising to 152.77 yen from 151.08 yen. The euro, meanwhile, weakened slightly to $1.0786 from $1.0800.

(With inputs from AP) 

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