Global market update: Wall Street indices erased its gains from signs of subsiding inflation as investors seems weary of US shutdown on October 1, 2023. Dow Jones index ended 0.47 per cent lower whereas S&P 500 index went down 0.27 per cent on Friday. However, tech heavy weight Nasdaq manged to remain in positive territory as it closed 0.14 per cent higher on Friday. MSCI’S global equities ended slightly lower after a choppy session on Friday last week as investors prepared for a likely US government shutdown and adjusted portfolios for the quarter’s end.
MSCI’s gauge of stocks across the globe shed 0.04 per cent on the day. For the month of September it fell 4.3 per cent, which was its biggest monthly decline in a year. For the quarter it lost 6.6 per cent, for its first quarterly decline in a year.
Gold price hits two month low on soaring US dollar rates. Buy or wait?
According to the latest data from CME Group’s Fedwatch tool, traders were betting on an 85.8 per cent probability that the Fed would keep rates steady at its next meeting in November compared with an 80.7 per cent probability on Thursday.
In currencies, the US dollar was headed for its biggest quarterly gain in a year and gains for the 11th consecutive week while Japan’s yen remained under scrutiny for potential government intervention.
US government shutdown imminent: Republicans reject own funding bill
The yen weakened 0.07 per cent versus the greenback at 149.43 per dollar. The dollar index, which measures the greenback against a basket of major currencies, rose 0.038 per cent, with the euro up 0.09 per cent to $1.0568.
Sterling was last trading at $1.22, up 0.02 per cent after data showed Britain’s economic performance since the start of the COVID-19 pandemic was stronger than previously thought.
In US Treasuries, Benchmark 10-year yields were well above their lows of the day but still down 1.6 basis points at 4.581 per cent, from 4.597 per cent late on Thursday. The 30-year bond was last down 2.3 basis points to yield 4.7065 per cent. The 2-year note was last was down 1.3 basis points to yield 5.0582 per cent.
US shutdown in focus
Hardline Republicans in the US House of Representatives on Friday afternoon rejected their leader’s proposed bill to temporarily fund the government, making it all but certain that federal agencies will partially shut down beginning on Sunday.
Underlying US inflation pressures moderated in August, with the annual rise in prices excluding food and energy falling below 4 per cent for the first time in more than two years – seen as welcome news for the Federal Reserve as it ponders the monetary policy outlook. Earlier data also showed headline inflation in Europe rising more slowly than expected and at its lowest level in two years. But an earlier boost to stocks from signs of subsiding inflation faded as the session wore on.
(With inputs from Reuters)
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Updated: 30 Sep 2023, 08:40 AM IST