Despite the concerns that central banks will have to resort to more aggressive interest rate hikes in the face of high inflation and that this situation will drag the economies into recession, the desire to recover in the stock markets came to the fore yesterday.
The increase in the risk appetite was effective when US President Joe Biden, who came to the first Asian variety after he came to the mission in January 2021, signaled that he would reconsider the tariffs applied to China by the Former Leader Donald Trump administration. On the other hand, expectations that the US Federal Reserve (Fed) could take a policy step to limit the decline in stocks and stabilized asset prices also reflected positively on investor decisions.
While the statements of Fed officials remain in the focus of the markets, Atlanta Fed Leader Raphael Bostic said that it would be logical to give a medium to the rate hike in September to evaluate the impact on inflation and the economy, following the expected half- point rate hikes in the next two months.
JP MORGAN’S CLAIM ON INTEREST INCOME FOR THIS YEAR
With these developments, a buying trend was followed by the banking sector in the New York stock market yesterday, and the Dow Jones index gained 1.98 percent, the S&P 500 index 1.86 percent and the Nasdaq index 1.59 percent. Shares of JP Morgan, Bank of America and Citigroup rose close to 6 percent, while those of Wells Fargo rose close to 5 percent after JP Morgan, one of the leading banks in the USA, raised its interest income forecast for this year. The dollar index fell all the way to the end of 102 yesterday, reaching its lowest level in nearly a month. The US 10-year bond yield, on the other hand, stabilized at 2.84 percent after rising from 2.78 percent to 2.86% yesterday.
Yesterday, European Central Bank (ECB) Leader Christine Lagarde stated that she expects the net purchases under the bond purchase program to end at the beginning of the third quarter, “This will allow for an interest rate hike at our meeting in July in line with forward-looking guidance.” she used every word. While Lagarde’s statements, pointing out that the interest rates could be converted into positives until September, supported the stock markets, the DAX 30 index in Germany rose by 1.38 percent, the CAC 40 index in France by 1.17 percent and the FTSE 100 index in the UK by 1.67 percent. . Euro/dollar parity increased 1.2 percent yesterday and tested its highest level in about a month with 1.07.
On the Asian side, according to the information released today, Japan’s leading manufacturing industry PMI decreased by 0.3 points to 53.2 in May compared to the previous month, while the services sector PMI increased. The information that the problems in the real estate department, which is one of the building blocks of the economy in China, and the continuation of the epidemic measures, increased the economic growth concerns and had an effect on the stock markets turning negative today. With these developments, Asian stock markets followed a selling course this morning, while the Shanghai composite index in China decreased by 1 percent, the Nikkei 225 index in Japan decreased by 0.8 percent and the Hang Seng index in Hong Kong decreased by 1.6 percent. In Asian stock markets, it was seen that the negative atmosphere created by the worries about the growth of China was effective on the European and US index futures contracts.
DOLLAR EXCEEDED 16 TL
In Borsa Istanbul, where domestic volatility was high yesterday, the BIST 100 index closed the day at 2,380.90 points with a price gain of 0.36 percent. Dollar/TL, on the other hand, was trading at 15.9760 at the opening of the interbank market today, after closing at 15.9316 with an increase of 0.2 percent compared to the previous closing level. It is currently trading at 16.0290 level.
Analysts stated that the concerns focused on inflation, growth and more tightening push the investors to be cautious and said that the volatility in the markets may remain on the agenda for a while.
Analysts stated that the statements of Fed Leader Jerome Powell and ECB Leader Christine Lagarde, as well as the ongoing news flow from Davos Hill, will be in the focus of the markets, and that the Purchasing Managers Index (PMI) data to be announced around the world will come to the fore on the information agenda.
Analysts stated that, technically, the BIST 100 index is at the level of 2.350 and 2.290, while the levels of 2,470 are in the resistance position.