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Global stock indices mixed as markets await economic data and political developments
Global stock indices saw markedly mixed performance during today’s trading session, as investors remained awaiting developments in the trade talks between Washington and Beijing and reacted to economic data released in Europe, the United States, and Asia.
In Asian markets, performance was mixed:
- Australia’s ASX 200 index rose 0.84% to close at 8,587.20 points.
- Japan’s Nikkei index rose 0.32% to 38,211.51 points.
- India’s NIFTY 50 index settled around 25,104.25 points, little changed.
- In contrast, Hong Kong’s Hang Seng Index fell by 0.08%, and China’s Shanghai Composite Index fell by 0.44%.
In Europe, performance was divided between slight increases and limited declines:
- The STOXX 600 index rose 0.03% to 553.38 points.
- The UK’s FTSE 100 rose 0.50% to 8,876.02 points, supported by a decline in bond yields.
- France’s CAC 40 index posted limited gains of 0.04% to 7,794.85 points.
- In contrast, the German DAX fell by 0.37% to 24,085.42 points, and the Italian FTSE MIB fell by 0.29%.
In the United States, indices opened slightly higher, with the exception of the Dow Jones Index:
- The DJIA index fell marginally by 0.01% to 42,759.31 points.
- The S&P 500 index rose 0.24% to 6,020.03 points.
- The NASDAQ rose 0.32% to 19,653.81 points.
- The Russell 2000 gained 0.43% to 2,153.61 points.
This divergence reflects the cautious mood in global markets, as investors closely monitor upcoming inflation data from the United States, as well as developments related to the monetary policies of major central banks, and political developments and strategic deals in Europe.
Second: British data increases expectations of an imminent interest rate cut.
1. Bond market:
The yield on 10-year UK bonds fell to 4.538%, down about 10 basis points.
Yields on two- and 30-year bonds also registered a similar decline, in a quick response to weak labor market data.
2. Job and wage data:
The unemployment rate rose to 4.6%, compared to a previous reading of 4.5%.
The number of job openings fell to 736,000, a decrease of 63,000 jobs (7.9%) during the period from March to May.
Wages (including bonuses) grew at an annual rate of 5.3% for the period from February to April, a marked slowdown compared to the 6.1% rate in December.
3. Expectations:
The Bank of England is expected to cut interest rates to 3.75% before the end of the year.
However, market expectations indicate that the central bank will keep interest rates unchanged at 4.25% at its next meeting later this month.
4. Economic background:
Experts believe that the weak hiring appetite is linked to several factors, including the rise in the minimum wage, a package of new laws to protect workers, and increased tax burdens on employers, which reduce their willingness to hire.
Experts believe that the weak hiring appetite is linked to several factors, including the rise in the minimum wage, a package of new laws to protect workers, and increased tax burdens on employers, which reduce their willingness to hire.
Third: German political opposition to UniCredit’s acquisition of Commerzbank
German Chancellor Friedrich Merz criticized the surprise takeover bid by Italian bank UniCredit and emphasized the importance of preserving Commerzbank as an independent German financial institution.
UniCredit has gradually built a stake in derivatives to 28%, and the European Central Bank has allowed it to increase its stake to 29.99%.
The German government, particularly under the ruling coalition led by Olaf Scholz, opposes the offer and prefers to keep the bank under national control.
Commerzbank shares have risen nearly 75% since the beginning of the year, buoyed by the government’s move to ease financial regulations and increase defense spending, making the bank an attractive target for foreign investors and institutions.
