Market Update: 28 May 2024
Despite retesting its record high of 7,910pts last week, the ASX 200 was down 1.1% this week, reflecting growing doubts over the Fed’s potential rate cuts amidst strong economic data. The index experienced its first four-day fall in five weeks, with only four out of the eleven major sectors ending positively. However, there were bright spots, particularly in the Technology sector, which surged by 2.8%, led by Nvidia’s robust earnings report that buoyed global tech stocks. Amidst this mixed performance, the Australian market remains resilient, showing signs of strength in specific sectors despite broader uncertainties.
In the broader global context, market dynamics have been lively and diverse. The US indices saw a mixed performance, with the Dow Jones down 2.3%, the S&P 500 remaining flat, and the Nasdaq up by 1.4%. The technology sector emerged as a standout performer, especially for the Nasdaq, driven largely by Nvidia’s positive influence. Meanwhile, in Europe, the Euro Stoxx 50, Euro Stoxx 600, and FTSE experienced declines of 0.6%, 0.5%, and 1.2%, respectively. Despite the European Central Bank signalling a potential rate cut in June, divisions emerged over the pace of further easing, particularly amidst strong Eurozone data.
Across the Asia-Pacific region, market movements varied. Greater China and Hong Kong equities saw declines of 2.1% and 4.8%, respectively, following a previous week’s rally. Foreign investment in China continued its slowdown for the fourth consecutive month in April. Japanese markets ended the week down 0.4%, with warnings of potential exchange rate intervention adding to investor concerns. These fluctuations illustrate the nuanced challenges and opportunities present across global markets, as economic data and geopolitical factors continue to shape investor sentiment. Despite uncertainties, there remain pockets of resilience and potential for growth, underscoring the importance of a diversified and adaptable investment strategy in navigating today’s complex financial landscape.
Published 28/5/2024
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