European stock markets mostly rose on Tuesday, Asian equities moved mixed and oil prices fell as investors focused on the prospect of a long-awaited interest rate cut in the US and tensions in the Middle East.
Traders were more cautious this week after Federal Reserve Chairman Jerome Powell sent markets higher on Friday when he signaled that a rate cut was imminent amid cooling inflation.
Powell was followed on Monday by San Francisco Fed chief Mary Daly, who said it was “hard to imagine” that there would be no rate cuts next month.
Later this week, investors will closely examine a number of US indicators for clues about the size of the promised rate cut that the Fed is expected to announce at its next meeting on September 17-18.
US economic growth data for the second quarter is expected on Thursday, followed by the Fed’s preferred inflation indicator on Friday and labor market data next week.
Traders are also eagerly awaiting the latest results from chip giant Nvidia, due to be released on Wednesday, which could provide further clues about demand for the hardware that is driving the AI boom.
While European stocks were mostly higher on Tuesday, “the right direction may be lacking ahead of Nvidia’s results release later in the week,” Jane Foley, head of foreign exchange strategy at Rabobank London, told AFP.
She said markets were also looking to U.S. economic data to provide “more clarity on the extent to which the Fed might be willing to ease in September and the coming months.”
London’s FTSE 100, which closed on Monday for a bank holiday, and Frankfurt’s DAX rose, while Paris’ CAC 40 was unchanged.
In Asia, Hong Kong’s value rose despite losses in the technology sector, which occurred after Temu owner PDD announced disappointing sales figures and warned about future growth prospects.
Shares of the New York-listed e-commerce company fell by a record 28.5 percent, corresponding to a loss of market capitalization of tens of billions of dollars.
In Hong Kong, the shares of competitors Alibaba and JD.com each fell by around four percent.
Tokyo and Mumbai rose, but Shanghai, Seoul, Sydney and Taipei fell.
– Fears in the Middle East –
Investors are also monitoring tensions in the Middle East after Sunday’s exchange of fire between the Iran-backed Lebanese militant group Hezbollah and Israel raised fears of a wider conflict.
Crude oil prices fell slightly but largely held on to Monday’s gains of at least three percent, with Brent, the international benchmark, above $80 a barrel.
Traders were also shocked by news that the government in oil-rich eastern Libya would close fields under its control and halt production and exports “until further notice.”
“A mix of geopolitical tensions, volatile oil prices and mixed economic data has created a complex and uncertain backdrop for global financial markets,” said Luca Santos, currency analyst at ACY Securities.
“While the initial response was caution, the evolving nature of these risks means market conditions could change rapidly,” Santos said.
– Key figures around 10:30 GMT –
London – FTSE 100: Plus 0.2 percent to 8,342.20 points
Paris – CAC 40: unchanged at 7,591.24
Frankfurt – DAX: Plus 0.2 percent to 18,645.03
Tokyo – Nikkei 225: Plus 0.5 percent to 38,288.62 (closing price)
Hong Kong – Hang Seng Index: Increase of 0.4 percent to 17,874.67 (closing price)
Shanghai – Composite: 0.2 percent down to 2,848.73 (closing price)
Dollar/Yen: Rise to 144.83 yen from 144.53 yen on Friday
Euro/Dollar: Down to $1.1164 from $1.1166
Pound/Dollar: Up to $1.3221 from $1.3184
Euro/pound: Down from 84.64 pence to 84.44 pence
West Texas Intermediate: Down 0.8 percent to USD 76.83 per barrel
Brent North Sea oil: down 0.6 percent to USD 80.95 per barrel
New York – Dow: Plus 0.2 percent to 41,240.52 (closing price)
dan-lth/kjm
