By IFCMarkets
US stocks were on the rise on Thursday as banking and industrial sectors soared while Apple and other technology stocks dropped. US dollar index, a measure of a greenback’s value against a basket of six major currencies, continued its way up and gained 0.36% to 98.856 in its fourth straight session of gains. Dow Jones industrial average advanced 1.18% to 18,808.42 to its all-time high, S&P 500 rose 0.2% to 2,167.57 and Nasdaq composite fell 0.81% to 5,208.80 due to weak performance of technologies sector. US banking sector was on the rise for 4th straight day. Markets reacted positively on the news Trump is planning to repeal Dodd-Frank Act which has been regulating financial system since 2010. Investors expect higher inflation and economic growth under Trump as he promised generous tax cuts and infrastructure and defense spending. As chances for rate hike increase and bond yield curve becomes steeper, banking sector benefits. S&P financial sector advanced 3.70% to its high since 2008. Stocks of Wells Fargo & Co soared 7.58% to the highest since January, Bank of America stocks advanced 4.40%, JP Morgan Chase rose 4.64% to their record high. On the other hand, Apple stocks slumped 2.79% and Amazon stocks lost 3.82% pushing S&P 500 technology index 1.59% lower. Today at 16:00 CET the Consumer confidence index for September will come out in US. At 19:00 CET the Baker Higher oil rigs data will come out.
European stocks retreated on Friday on arisen concerns over Trump’s policies. Panic buying is over and investors begin to reconsider ambitious plans of Trump. Construction and materials sectors lost 1.1% with poor performance of cement makers LafargeHolcim and Heidelberg Cement and Spanish builder ACS. On the other hand, Allianz stocks advanced 2.7% after it released strong Q3 earnings. Insurers and banks still outperformed on surge in global bond yields and promises of Trump. Defensive sectors as utilities and consumer staple rebounded from Thursday losses. EURUSD is down 0.18% to 1.0871. STOXX EUROPE 600 lost 0.1%. British FTSE 100 fell 1.04% to 6,756 on Friday, German DAX 30 rose 0.59% to 10,692 on positive economic news, French CAC 40 fell 0.37%. Speaking of economic news, final consumer price index for October in Germany came out in line with expectations today in the morning.
Asian stocks were mixed today as Japanese and Chinese stocks advanced in the aftermath of Trump’s victory while Hong Kong stocks retreated on expectations of weak GDP data. Nikkei rose 0.2% to 17,374.79 having earlier hit 17,621.73, its high since February 2. Investors booked profits after the market rally after the US presidential elections which boosted hopes the policies of Trump could stimulate economic growth. The Japanese index jumped 2.8% for a week following the steps of Wall Street. Financials soared on prospective of higher inflation in US which makes rate hike more probable. Dai-chi Life Holdings advanced 8.8%, Mitsubishi UFJ Financial Group sky-rocketed 9.0%. Mitsubishi Materials Corp advanced 6.9% while Dowa Holdings rose 4.0% on the news copper soared 5% to a 16-month high after Trump’s victory. Broader Topix rose 0.1% to 1,378.28. Yen weakened against the rising dollar and USDJPY reached the level of 106.95, its record high since July. Hong Kong’s Hang Seng fell 1.1% to 22,599.44 in anticipation of weak GDP data. China’s CSI300 index advanced 0.5% to 3,405.9 while Shanghai Composite index rose 0.6% to 3,190.50 on good performance of raw materials and infrastructure sectors. Australian S&P/ASX index rose 0.8% to 5,370.7 on Friday and closed this week 3.7% higher. Financials, metals and mining sectors were advancing while industrials and telecoms dipped.
Gold prices hit its 3-week low on Friday due to rising US bond yields and firm US dollar after Trump’s victory which spurred inflation fears. Spot gold fell 0.3% to $1,255.85 an ounce. US gold futures lost 0.9% to $1,255.40 an ounce having earlier touched it’s a 4-week low of $1,250.40. Copper sky-rocketed to its 16-month high of $5,714 a tonne as newly elected US president Donald Trumps is planning to increase investments in infrastructure.
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