Major Gulf markets gain
Major stock markets in the Gulf rose in early trading on Thursday after benign US consumer inflation data overnight reinforced bets that the Federal Reserve would start cutting interest rates next month.
Traders remain convinced that the Fed will reduce rates on Sept. 18 for the first time in 4-1/2 years, but are split on whether policymakers will opt for a super-sized 50 basis-point reduction.
While inflation is slowing, signs it may remain sticky spurred a reduction of bets on a larger cut to 37.5 percent from about 50 percent a day earlier.
A major macroeconomic test looms later on Thursday with the release of US retail sales figures.
Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed’s decisions, as most regional currencies are pegged to the US dollar.
Saudi Arabia’s benchmark index gained 0.6 percent, with Dr Sulaiman Al Habib Medical Services rising 4 percent and MBC Group advancing 7.5 percent.
European stock markets climb at start
Europe’s main stock markets rose at the start of trading on Thursday following gains in Asia and on Wall Street, as investors reacted to global economic data.
London’s FTSE 100 index gained 0.1 percent to 8,289.02 points.
In the eurozone, the Paris CAC 40 index won 0.2 percent to 7,345.95 points and Frankfurt’s DAX rose 0.4 percent to 17,951.47.
Australian stocks edge higher
Australian shares edged higher on Thursday, helped by index heavyweight financials, while fresh US inflation data reassured investors that the Federal Reserve would start cutting rates next month.
The S&P/ASX 200 index rose 0.4 percent to 7,878.2 by 0011 GMT. Data released on Wednesday showed that US consumer prices rose moderately in July, opening the door wider for the Fed to cut rates next month.
The yield on benchmark 10-year Treasury notes rose to 3.839 percent, compared with its US close of 3.822 percent.
Overnight, the US Dow Jones Industrial Average rose 0.61 percent.
The S&P 500 gained 0.38 percent, while the Nasdaq gained 0.03 percent.
Among individual stocks in Australia, Origin Energy fell as much as 10.3 percent after the power producer warned of a decline in electricity profits due to lower wholesale costs and reduced retail margins.
Japan’s Nikkei increases on solid economic growth
Japan’s Nikkei share average rose on Thursday, as investors snapped up undervalued stocks after data showed better-than-expected economic growth in the June quarter and Wall Street closed higher overnight on September rate cut prospects.
The Nikkei had risen 1 percent to 36,808.75 by the midday break after starting in negative territory on some profit-taking, while the broader Topix was up 1.2 percent at 2,612.48.
Stocks sensitive to the economy’s performance received some support from the data showing Japan’s economy expanded by a faster-than-expected annualised 3.1 percent in April-June.
Oil and coal producers rose 4.5 percent to lead sectoral gains, while banks and securities firms were not far behind, each gaining about 4 percent.
But the larger trend was investors kept buying shares that have underperformed since last month, particularly financials which have not recovered as much as expected until now, said Kenji Abe, chief strategist at Daiwa Securities.
Indian stocks muted
Indian shares closed little changed on Wednesday, as broad-based profit booking offset gains in information technology (IT) stocks after soft U.S. producer price data signalled cooling inflation.
The NSE Nifty 50 index ended 0.02 percent higher at 24,143.75 points, and the S&P BSE Sensex added 0.19 percent to 79,105.88.
The IT index gained 1.58 percent after data showed that U.S. producer prices rose less than expected in July, indicating a cooling economy and boosting hopes of a September rate cut by the Federal Reserve.
IT companies are sensitive to the U.S. economic outlook as they earn a significant share of their revenue from the country.
Sri Lanka stocks close higher
Sri Lankan shares closed higher on Tuesday, led by gains in financial and information technology stocks.
The CSE All-Share index settled 0.31 percent higher at 11,347.41, gaining for third straight session.
Nation Lanka Finance and Blue Diamonds Jewellery Worldwide were the top percentage gainers on the CSE All Share, jumping 50 percent and 33.3 percent, respectively.
Trading volume on the CSE All-Share index rose to 16.9 million shares from 15 million in the previous session.
The equity market’s turnover rose to 648.6 million Sri Lankan rupees ($2.2 million) from 337.5 million rupees in the previous session, according to exchange data.