The S&P 500 and Nasdaq reached new record highs on Friday, driven by a tech rally as concerns lessened regarding the Federal Reserve delaying interest rate cuts. The latest ISM data revealed that factory activity contracted more than anticipated in February, and the Michigan consumer sentiment was sharply revised downward. The PCE inflation report provided some relief on inflationary pressures, while higher-than-expected initial claims reinforced the expectation that the Fed might initiate interest rate cuts in June. On the corporate front, New York Community Bancorp shares plummeted by 25.89% due to identified material weaknesses in loan risk control. In contrast, Nvidia gained over 4%, while Apple lost about 0.6% after being removed from Goldman Sachs' conviction list. The S&P 500 posted a 0.97% weekly gain, and the Nasdaq was up 1.74%, marking their seventh positive week out of the last eight. However, the Dow lagged, down 0.11%.
Frankfurt's DAX 40 index trimmed early gains but closed 0.3% higher at 17,735 points on the first trading session of March, a record high, after data indicating that Eurozone inflation slowed less than expected in February supported the cautious stance of the European Central Bank on future interest rate cuts. The benchmark index touched a new record high earlier in the session after in-line US PCE price figures bolstered hopes that major central banks may commence policy easing by the middle of the year. Among individual stocks, Daimler Truck surged by 17% after the German truckmaker provided better-than-expected earnings guidance for 2024, building on a notable 39% increase reported last year.
The FTSE 100 index closed 0.7% higher on Friday, despite marking a second consecutive week of losses as investors digested corporate developments. Rightmove predicts a revenue growth of 7-9% in 2024 due to increased traffic on its real estate platform. Additionally, UK lender Nationwide reported that British house prices saw an annual increase for the first time in a year last month. Among single stock movements, Pearson saw a 5.5% increase in its stock price after meeting market expectations for a 31% rise in operating profit in 2023. Standard Chartered and Anglo American also gained more than 4%. Meanwhile, ITV's stocks advanced by over 14% following the sale of its 50% stake in BritBox International to BBC Studios for £255 million. British investors are now waiting for Finance Minister Jeremy Hunt's pre-election budget, expected to include tax cuts to address the country's £2.5 trillion debt.
The Shanghai Composite rose 0.39% to close at 3,027 while the Shenzhen Component climbed 1.12% to 9,435 on Friday, extending gains from the previous session as investors reacted to the latest private sector activity reports in China. Official data showed that manufacturing activity contracted for the fifth straight month in February, while services sector growth hit five-month highs. Meanwhile, a private survey showed that Chinese factory activity expanded more than expected last month. The benchmark indexes also advanced for the third straight week as a series of policy measures from Beijing and further monetary easing from the central bank bolstered the market outlook. Technology stocks led the advance, with strong gains from IEIT Systems (10%), Dawning Information (7.6%), Unisplendour (10%), Unigroup Guoxin (6.5%) and iFLYTEK (6.4%).
The Nikkei 225 Index jumped 1.9% to close at 39,911, scaling new all-time highs as a weak yen, strong corporate earnings and excitement around artificial intelligence and related products pushed the market higher. Bank of Japan Governor Kazuo Ueda also said it was too early to conclude that sustained achievement of the central bank’s 2% target can be foreseen, stressing the need to scrutinize more data on the wage outlook. Moreover, Japanese shares tracked gains on Wall Street overnight as the latest US PCE price index data, the Federal Reserve’s preferred inflation gauge, came in line with expectations. Technology stocks led the charge, with gains from Tokyo Electron (4.1%), Disco Corp (3.8%), SoftBank Group (1.3%), Screen Holdings (3.7%) and Advantest (3%). Other index heavyweights also rallied, including Kawasaki Kisen (8.3%), Sony Group (2.1%) and Toyota Motor (1.6%). The benchmark index gained 2.08% this week.
SENSEX, marking the second straight session of advances. Market sentiment was buoyed by optimism surrounding faster-than-expected economic growth and robust PMI data for the domestic economy. Elsewhere, the US PCE price index data supported expectations of rate cuts by the Federal Reserve in the coming months. On the corporate front, Tata Steel (+6.5%), JSW Steel (+4.5%), L&T (+4.4%), Titan (+3.7%), IndusInd Bank (+3.4%), ICICI Bank (+3.2%) and Maruti Suzuki India (+3%) were the top gainers, while HCL Tech (-1.4%), Infosys (-1.2%) and Sun Pharma (-1.1%) weighed the most on the index. The BSE ended the week with a gain of 0.8%.
