Global Markets Roundup: 23 Feb 2024

Global stock markets are poised for a week of substantial gains, buoyed by Nvidia's remarkable financial performance, which has triggered a surge in technology stocks worldwide. On Thursday, Nvidia's shares soared by 16.4%, propelling the company's market value to a record $277 billion. This impressive result has ignited a robust AI-led rally, pushing major indices such as the S&P 500, Dow Jones Industrials, Europe's STOXX 50, and Japan's Nikkei to unprecedented highs.

Despite Tokyo being closed for a holiday, Nikkei futures (NKc1) traded up approximately 300 points. While some regional tech shares are taking a brief pause after a stellar rally, the MSCI Asia-Pacific ex-Japan IT index (.MIAPJIT00NUS) still climbed by 0.5%, reaching its highest level since March 2022. South Korea's Hynix (000660) and Taiwan Semiconductor Manufacturing Co Ltd (2330), key players in the semiconductor industry and clients of Nvidia, experienced notable gains of 3.7% and 1%, respectively. The Global X Asia semiconductor ETF (3119) also saw an uptick of 1%. Chris Weston, Head of Research at Pepperstone in Melbourne, noted, "The Nvidia effect has rippled through global equity markets and given fresh wind to markets that were looking ominously poised for a 3-5% drawdown." He anticipates shallow pullbacks in Nvidia's stock and expects buyers to drive prices higher ahead of the company's highly anticipated GTC conference on March 18, where new products and innovations are expected to be unveiled.

The broader Asia-Pacific shares index (.MIAPJ0000PUS) retreated slightly but remained up by 0.2%, contributing to weekly gains of 1.4%. In China, the Shanghai Composite index (000001) surpassed the psychologically significant 3,000-point mark before flattening, concluding the week with a 4.3% increase. Meanwhile, Hong Kong's Hang Seng index (HSI) slipped 0.2%. Concerns about China's property market persist as new home prices fell for the seventh consecutive month in January, indicating fragility despite policymakers' attempts to restore confidence.

Currency Markets

The U.S. dollar index DXY was down 0.4% for the week at 103.91. The yen (USDJPY) held firm at 150.48 per dollar on Friday, slightly above the critical 150 level that could prompt Japanese intervention to counter the currency's decline. However, the yen has faced depreciation against a diverse range of currencies, with the Australian dollar (AUDJPY) and New Zealand dollar (NZDJPY) reaching 9-year highs against the yen, currently standing at 98.84 and 93.27 yen, respectively. The euro (EURJPY) hovered at 162.82 yen, approaching a 15-year high of 164.30.

Oil prices experienced a decline after earlier gains driven by concerns over supply disruptions in the Red Sea. Brent crude (BRN1!) eased by 0.4% to $83.29, while U.S. crude (CL1!) slipped 0.5% to $78.24 per barrel. Gold prices exhibited a marginal upward movement, positioning themselves for a noteworthy weekly gain – the first in three weeks. This surge was attributed to a generally subdued U.S. dollar and escalating geopolitical tensions in the Middle East, both contributing to the heightened attractiveness of the precious metal.

As of 04:11 GMT, spot gold (GOLD) showed a modest increase of 0.1%, reaching $2,025.7 per ounce. Notably, the week witnessed an overall uptick of 0.7% in the value of gold. Simultaneously, U.S. gold futures (GOLD) experienced a 0.2% uptick, settling at $2,035.3 per ounce. This measured rise underscores the impact of global factors influencing gold's market dynamics, with the weakened U.S. dollar and geopolitical uncertainties driving investor interest in the precious metal.

Copper Furtures - The benchmark three-month LME contract reflects the market resilience with a modest 0.2% increase, reaching $8,603.50 per ton. This subtle uptick in price further reinforces the prevailing strength of copper in the face of economic headwinds and underscores its significance as a key barometer for global economic health.

London cocoa futures (C2!) experienced a notable upswing, surpassing the significant psychological threshold of 5,000 pounds on the ICE exchange. Simultaneously, New York cocoa (CC2!) breached the noteworthy milestone of $6,000, driven by a supply shortage that propelled both markets to achieve unprecedented record highs.

Arabica coffee futures (KCK24) experienced a decline of -4.95 points (-2.63%), while March ICE robusta coffee futures (RMH24) saw a decrease of -78 points (-2.40%). The retreat in coffee prices observed on Thursday resulted in arabica reaching a one-week low, and robusta dropping to a four-week low. The market sentiment was influenced by StoneX's research findings, which indicated a projected 4.2% year-on-year increase in Brazil's 2024/25 coffee production, reaching an estimated 67 million bags. This projection exerted downward pressure on coffee prices during the trading session.

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General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team

Rating: Mixed Outlook

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