Although the concerns that central banks will have to resort to more aggressive interest rate hikes in the face of high inflation and that this situation will drag the economies into recession remain on the agenda, the desire for recovery in the stock markets came to the fore yesterday.
The increase in the risk appetite was effective when US President Joe Biden, who went on his first Asian tour after his appointment in January 2021, signaled that he would reconsider the tariffs applied to China by the former President Donald Trump administration. On the other hand, expectations that the US Federal Reserve (Fed) could take policy steps to limit the decline in stocks and stabilize asset prices also reflected positively on investor decisions.
While the statements of Fed officials remain in the focus of the markets, Atlanta Fed President Raphael Bostic said that it may be logical to pause the rate hike in September to evaluate the impact on inflation and the economy after the half-point rate hikes expected in the next two months.
With these developments, a buying trend was followed by the banking sector in the New York Stock Exchange yesterday and the Dow Jones index gained 1.98 percent, the S&P 500 index gained 1.86 percent and the Nasdaq index gained 1.59 percent. Shares of JP Morgan, Bank of America and Citigroup rose close to 6 percent, while those of Wells Fargo rose close to 5 percent after JP Morgan, one of the leading US banks, raised its interest income forecast for this year. The dollar index fell to the 102 mark yesterday, reaching its lowest level in nearly a month. The US 10-year bond yield, on the other hand, stabilized at 2.84 percent, after rising from 2.78 percent to 2.86% yesterday.
Yesterday, European Central Bank (ECB) President Christine Lagarde stated that she expects net purchases under the bond purchase program to end at the beginning of the third quarter, adding, "This will allow for an interest rate hike at our meeting in July, in line with forward-looking guidance." she used the phrase. Lagarde's statements, which pointed out that the interest rates could be turned positive until September, supported the stock markets, while the DAX 30 index in Germany rose by 1.38 percent, the CAC 40 index in France by 1.17 percent and the FTSE 100 index in the UK by 1.67 percent. . Euro/dollar parity increased 1.2 percent yesterday and tested its highest level in about a month with 1.07.
On the Asian side, according to the data released today, Japan's leading manufacturing industry PMI decreased by 0.3 points to 53.2 in May compared to the previous month, while the service sector PMI recorded an increase. The data pointing to the ongoing problems in the real estate sector, one of the building blocks of the economy in China, and the continuation of the epidemic measures, increased economic growth concerns and were effective in the negative turn of the share markets today. With these developments, Asian stock markets followed a selling course this morning, while the Shanghai composite index in China decreased by 1 percent, the Nikkei 225 index in Japan decreased by 0.8 percent and the Hang Seng index in Hong Kong decreased by 1.6 percent. In Asian stock markets, the negative atmosphere created by the concerns about the growth of China was effective on the European and US index futures contracts.
In Borsa Istanbul, where domestic volatility was high yesterday, the BIST 100 index closed the day at 2,380.90 points with a 0.36 percent gain. Dollar/TL is traded at 15.9760 at the opening of the interbank market today, after closing at 15.9316 with an increase of 0.2 percent compared to the previous closing level yesterday.
Analysts stated that concerns about inflation, growth and further tightening push investors to be cautious and said that volatility in the markets may remain on the agenda for a while.
Analysts stated that the statements of Fed Chairman Jerome Powell and ECB President Christine Lagarde, as well as the news flow from the ongoing Davos Summit, will be in the focus of the markets, and that the Purchasing Managers Index (PMI) data to be announced around the world came to the fore on the data agenda.
Analysts stated that technically, the levels of 2.350 and 2.290 in the BIST 100 index are in the position of support and 2,470 points in the resistance position.
The data to be followed in the markets today are as follows:
10.00 Turkey, 1st quarter international investment position
10.30 Germany, May manufacturing industry and service sector PMI
11.00 Eurozone, May manufacturing and services sector PMI
11.30 UK, May manufacturing and services PMI
16.45 US, May manufacturing and services PMI
17.00 US, May Richmond Fed industrial index
17.00 US, April new home sales
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