The Australian equities market closed the week on a high note, with the ASX 200 up 1.8%, reaching a record close of 7,959.3 points. This surge was driven by positive US inflation and employment data, signalling potential interest rate relief in the US. Notably, the Commonwealth Bank of Australia overtook BHP to become the most valuable public company for the first time since November 2021. The week saw strong performances in eight out of the eleven major sectors, with Discretionary and Real Estate leading the gains. Utilities and Materials were the weakest performers.
US equity markets also showed gains, with the S&P 500, Nasdaq, and Dow Jones up 0.9%, 0.2%, and 1.6% respectively. The US headline CPI fell by 0.1% from May to June, the lowest since April 2021, indicating a steady return to disinflation. Additionally, June’s employment data showed a cooling labour market with unemployment rising to 4.1%. These factors strengthen the case for potential interest rate cuts. Across the Atlantic, European markets also finished positively, with major indices like the Euro Stoxx 50 and FTSE benefiting from the optimism surrounding potential US interest rate cuts.
In Asia, China’s markets experienced a positive week with the Hang Seng and Shanghai Composite up 2.8% and 0.7% respectively. The China Securities Regulatory Commission took measures to discourage aggressive selling by suspending securities re-lending and raising margin requirements for short sellers. Additionally, China reported better-than-expected export figures for June, despite weak imports. Meanwhile, Japan’s Nikkei saw a slight increase of 0.7% for the week. However, the yen’s strength following US inflation data and concerns about potential government intervention in the currency market created some volatility.
Published 16/7/2024
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