The US consumer prices rose by 4.0% YoY in May. The annual increase in the US consumer price index (CPI) was the smallest in more than two years.
Following the inflation data, US stocks rallied with the S&P 500 and Nasdaq rising to fresh one-year highs.
The tech-heavy Nasdaq is up almost 30% year-to-date, while the benchmark S&P 500 has recovered about 22% from its October 2022 closing low. The rally was fuelled by gains in heavyweights such as Apple Inc, Nvidia Corp and Tesla Inc.
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Asian Markets
Japan’s Nikkei 225 jumped 1.05% and is heading towards its all time high. The Topix rose 0.85%.
South Korea’s Kospi fell 0.22%, while the Kosdaq was flat. Hong Kong’s Hang Seng index futures were trading around 10 points higher at around 19,535.
Australia’s S&P/ASX 200 rose 0.32%.
SGX Nifty was trading 39 points, or 0.21%, higher at 18,824, indicating a positive start for the Indian indices.
Wall Street
US stocks rallied on Tuesday after a modest rise in inflation in May.
The S&P 500 gained 0.69% to end at 4,369.06, while the Dow Jones Industrial Average closed 0.43% higher at 34,212.25 points. The Nasdaq rallied 0.83% to settle at 13,573.32 points.
On Tuesday, Nvidia shares jumped 3.9% to end a trading session with a market capitalization above $1 trillion. Tesla shares also rallied 3.55% after the automaker increased the price of its Model Y electric vehicle.
Shares of US banks rose as Wells Fargo’s net interest income outlook also boosted investor optimism on the sector. Positive comments from Wells Fargo’s Chief Financial Officer Mike Santomassimo, who said that the lender still expects to see a bump in net interest income later this year boosted sentiment, Reuters reported.
The S&P 500 Banks Index rose 1.14%, with JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Citigroup and Bank of America advancing between 1% and 2%.
Europe
European shares ended higher on Tuesday, led by technology and mining stocks.
The pan-European STOXX 600 index rose 0.3%. Britain’s FTSE 100 gained 0.3% to 7,594.78, while Germany’s Frankfurt DAX rose 0.8% to 16,230.68. France’s CAC 40 added 0.6% to 7,290.80.
The European Central Bank will hold its policy meeting on Thursday, where it is expected to hike rates by another 25 basis points to tame inflation.
Energy
Crude oil prices declined after industry data showed an unexpected rise in US crude stocks, signalling weak demand.
Brent crude futures fell 0.26%, to $74.10 a barrel, while US West Texas Intermediate (WTI) crude was at $69.20 a barrel, down 0.32%.
Currency
The dollar fell to near a three-week low to the euro and a one-month low versus sterling on Wednesday, after soft US inflation data.
The dollar index, which measures the currency against six major peers, was little changed at 103.29, after dipping to the lowest since May 22 overnight at 103.04.
Sterling edged 0.08% lower to $1.2602. The dollar eased 0.16% to 140.02 yen.
The Australian dollar was flat at $0.6768.
(With inputs from Reuters)
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Updated: 14 Jun 2023, 07:13 AM IST