Stocks in the US finished near the flatline ahead of the long weekend holiday, following the release of PCE inflation. The S&P 500 and the Nasdaq both added roughly 0.2%, while the Dow Jones closed slightly in the red. November's PCE inflation figures in the US came in cooler than expected, raising expectations that the Federal Reserve might initiate interest rate cuts next year. The Fed's preferred core inflation gauge dropped to 3.2%, below the anticipated 3.3%. The top-performing sectors included energy, materials, and consumer staples, while consumer discretionary saw a decline. Nike shares plummeted 11.8%, marking the biggest daily loss in more than a year, after the company revised its sales outlook and announced cost-cutting measures. For the week, the three major averages registered gains for the eighth consecutive period, with the S&P 500 up 0.4%, the Nasdaq rose 0.9%, and the Dow Jones ticked up by 0.1%. The US stock market will be closed on Monday for Christmas.
The FTSE 100 index closed marginally above the flatline at 7,698 on a shortened Friday session, remaining close to the three-month high touched earlier in the week as markets assessed the latest economic data for hints on the Bank of England’s rate trajectory. The British GDP was revised lower to point to a slight contraction in the third quarter and a stall in the second. Nevertheless, retail sales for November exceeded expectations. Banks were among the top performers of the session, benefiting from improved lending conditions amid the pullback in Gilt yields with Lloyds adding 2% and HSBC advancing nearly 1%. On the other hand, retailers showed the sharpest losses with JD Sports sinking more than 5% following underwhelming results from Nike in the US. The London Stock Exchange will not open equity trading on Monday and Tuesday for Christmas and Boxing Day celebrations.
The Shanghai Composite rose 4.04 points or 0.14% to end at 2,918.81, swinging from a drop in morning deals after Beijing softened its stance toward the online gaming industry by approving 105 domestic games. Last week, China moved to tighten curbs in the industry by publishing draft rules designed to reduce practices that encourage players to spend more money and time online, dampening market sentiment and pushing the index to close around its lowest level in a year. On Wall Street, stocks closed mixed Friday as investors digested cooler-than-expected US PCE data which firmed bets for Fed interest rate cuts in the New Year. Shares of energy minerals drove the gains, alongside consumer non-durables, utilities, and communications, in low-volume trading as many markets in Asia were closed for holidays. Chong Qing Changan jumped 3.8%, while Shanxi Xinghuacun Fen Wine, Luxshare Precision, and Foshan Haitian Food advanced nearly 2%, 1.4%, and 1.3%, respectively.
The CAC 40 index closed flat at 7,569 on Friday, as trading eased ahead of the holidays, while investors welcomed lower-than-expected US inflation. On the corporate front, property developer Nexity has entered exclusive negotiations to sell a 100% of its retail services business to asset management company Bridgepoint, based on a EUR 440 million valuation. Among CAC 40 index individual shares, Saint Goban was the top gainer, rising 0.7%, while Hermès was the biggest laggard, falling 2.7%. On the week, the CAC 40 index lost 0.4%, snapping a 5-week winning streak.
The BSE Sensex closed 0.34% higher at 71,107 on Friday, mainly driven by US demand dependent IT stocks, as the downward revision of US GDP growth for November increased bets of rate cuts starting in the first half of 2024. Meanwhile, traders awaited the US PCE inflation figures due later in the day for further cues on the monetary policy path. Among Sensex individual stocks, IT shares Wipro and HCL Tech were the top performers, rising 6.6% and 2.8%, respectively. Moreover, Tata Motors grew 2.2%, after India stock exchanges approved plan to convert DVR shares to ordinary shares. Conversely, State Bank of India was the biggest laggard, falling 1.1%. On the week, the BSE Sensex lost 0.5%, snapping the longest winning weekly run in six years, amid heavy profit-taking during the week.
The S&P/TSX Composite index closed 0.5% higher at the 20,881 level on Friday, reaching the highest since May 2022, supported by looser financial conditions. Preliminary data indicated that the Canadian GDP expanded from the previous month in November, while that for October was revised to show a stall. This aligns loosely with the Bank of Canada’s outlook for the country’s economic performance, maintaining the central bank’s hawkish outlook. Canadian government bonds continued to receive support from higher demand in US Treasuries and improved lending conditions for Canadian banks .TD Bank and BMO added 0.4% and 0.7% respectively, following the Federal Government’s approval of the bank’s acquisition of HSBC’s domestic unit. Gold miners and oil producers also traded in the green, tracking their respective commodities. On the week, the Canadian index jumped by 1%. The Toronto Stock Exchange is closed until December 27.
