US stock futures held steady on Monday as investors look forward to the Federal Reserve’s policy meeting this week. Last week, the Dow shed 0.02%, the S&P 500 lost 0.13% and the Nasdaq Composite fell 0.7%. The real estate, healthcare and technology sectors were the biggest laggards last week, while energy, communication services and materials firms outperformed the market. Those moves came as stronger-than-expected US inflation data raised concerns that the central bank could further delay interest rate cuts. The Fed is widely anticipated to hold rates steady this week, while expectations for a June rate cut edged lower to about 55%. Investors also look ahead to the latest earnings report of Micron Technology and FedEx this week.
The FTSE 100 fell 0.2% to close at 7,727 on Friday, but was still up 0.9% for the week following three consecutive weeks of losses. Reckitt Benckiser was the main dragger, down nearly 15%, after an Illinois court ordered it to pay $60 million to a mother whose baby died after drinking its baby formula Eptamil. On the opposite side, Vodafone (+5.7%) stood out as it confirmed the sale of its Italian business to Swisscom for €8 billion. British Airways owner IAG wasn’t far behind, up 6.2%, boosted by two broker upgrades to "outperform". Meanwhile, global market sentiment remained cautious as hotter-than-expected inflation in the US led to a reassessment of the path of interest rates. In the UK, attention is now turning to the upcoming interest rate decision by the Bank of England next week.
The Shanghai Composite rose 0.5% to around 3,070 while the Shenzhen Component gained 0.75% to 9,685 on Monday, with mainland stocks rising for the second straight session as investors cheered better-than-expected Chinese economic numbers. Data showed that retail sales, industrial production and fixed asset investment increased more than expected in the first two months of the year. Meanwhile, the unemployment rate for cities rose to 5.3% in February from 5.2% in January, the highest in seven months. High-growth consumer and technology stocks led the advance, with strong gains from Seres Group (5.4%), ChongQing Changan (5%), Chengdu Hi-Tech (6.5%), Eoptolink Technology (5.8%), Dawning Information (1.9%) and IEIT Systems (3.7%).
The Nikkei 225 Index jumped 2.67% to close at 39,740 while the broader Topix Index gained 1.92% to 2,722 on Monday, recouping most of the losses from last week in a broad market rebound, aided by a weakening yen. A weaker yen boosts the outlook for Japan's export-heavy industries and makes Japanese assets cheaper for foreign investors. Investors also look forward to the Bank of Japan’s policy decision on Tuesday amid speculations that it could exit its negative interest rates due to rising wages, high inflation and a stable economy. Technology stocks led the market higher, with gains from Tokyo Electron (3.8%), Disco Corp (5.8%), Lasertec (6%), Advantest (3.9%) and Socionext (8.1%). Other index heavyweights also advanced, including Mitsubishi UFJ (1.9%), Toyota Motor (2.3%), Kawasaki Kisen (1.6%), Fast Retailing (4.7%) and Sony Group (2%).
