TOKYO, Jan 16: Global stock markets mostly increased on Thursday, buoyed by a rally on Wall Street following positive news on US inflation.
France’s CAC 40 rose by 1.4% in early trading to reach 7,576.97, while Germany’s DAX saw a slight decline of less than 0.1%, remaining at 7,576.97. Meanwhile, Britain’s FTSE 100 gained 0.7%, climbing to 8,355.34. Futures for the S&P 500 were up by 0.2%, while the Dow Jones Industrial Average futures remained nearly unchanged.
In Asian markets, Japan’s Nikkei 225 index increased by 0.3%, closing at 38,572.60.
Data from the Bank of Japan indicated that wholesale prices in the country rose by 3.8% in December compared to the same month last year, intensifying pressure on the central bank to consider raising interest rates, potentially at its upcoming monetary policy meeting.
In China, Hong Kong’s Hang Seng index rose by 1.2% to 19,522.89, whereas the Shanghai Composite index experienced a near 0.3% increase to 3,236.03.
Australia’s S&P/ASX 200 jumped 1.4% to 8,327.00, while South Korea’s Kospi index advanced by 1.2% to 2,527.49.
Treasury yields fell after reports detailed the increased costs US households faced in December for essentials such as eggs, gasoline, housing, and other living expenses. The report indicated that overall inflation accelerated to 2.9%, up from 2.7% in November.
However, the latest US inflation figures revealed more encouraging trends beneath the surface. Excluding food and energy prices, which tend to fluctuate significantly month to month, core inflation trends slowed to 3.2% in December. Economists had anticipated that it would remain at 3.3% for a fourth consecutive month, according to FactSet.
The Federal Reserve closely monitors this core number over the overall inflation figure, and the news is particularly welcome amidst concerns that inflation improvements have stagnated and that achieving the Fed’s 2% target may be challenging.
Wall Street has been experiencing significant fluctuations recently as traders adjust their predictions for the Federal Reserve’s interest rate decisions for 2025. A further rate cut could stimulate the US economy and enhance investment prices, but it might also contribute to inflationary pressures.
Few traders anticipate that Wednesday’s data will persuade the Fed to lower its main interest rate at its upcoming meeting later this month, having already done so at three consecutive meetings since September. However, economists and analysts suggest that future data indicating a decrease in inflation pressure could pave the way for rate cuts later in the year, possibly even in March.
In other early Thursday trading, benchmark US crude dropped by 8 cents to $78.63 a barrel, while Brent crude, the global benchmark, declined by 11 cents to $81.92 a barrel.
The US dollar weakened to 155.72 Japanese yen from 156.47 yen. The euro was priced at $1.0288, down from $1.0289. (AP)
