Fears that the growth will be damaged in the global rising inflation and interest rate environment causes the sales in the stock markets to deepen. Data pointing to the decrease in consumer purchasing power and company profitability due to rising costs also triggers these concerns of investors and keeps risk appetite low.
In this process, where guidance on monetary policies is important, Atlanta Fed President Raphael Bostic emphasized that the Fed should be careful in its tightening policy, pointing to the uncertain effects of the new type of coronavirus (Kovid-19) epidemic, the war in Ukraine and the ongoing supply restrictions.
On the macroeconomic data side, the manufacturing industry Purchasing Managers Index (PMI) in the USA hit its lowest level in 3 months with 57.5 in May yesterday. New home sales in the country decreased by 16.6 percent in April due to the increase in housing prices and loan interest rates, and fell to the lowest level since April 2020 with 591 thousand.
With these developments, a mixed course was observed in the New York stock market yesterday, while technology companies experienced a sharp decline. The Dow Jones index rose 0.15 percent, the S&P 500 index fell 0.81 percent and the Nasdaq index fell 2.35 percent. Nasdaq's decline; Social media company Snap warned investors that it would not be able to meet its revenue targets for the second quarter, citing the macroeconomic environment deteriorating more and faster than expected. After this development, Snap's shares fell by 43 percent, Meta's shares were over 7 percent, Pinterest's shares were over 23 percent, and Alphabet's shares fell close to 5 percent. The dollar index, whose downward movement has accelerated recently, hit the lowest level in about a month with 101.6, while the 10-year bond yield of the USA was 2 percent.
European Central Bank (ECB) President Christine Lagarde, in her statement yesterday, stated that they do not foresee a recession for the Eurozone at the moment, "We expect the Eurozone to come out of the negative interest rate environment at the end of the third quarter." said. Following Lagarde, who kept his message of interest rate hikes in July and September with this statement, Robert Holzmann, one of the ECB members, said that a 50 basis point rate hike in July would be appropriate.
The European stock markets, which started the day with a rising following the hawkish messages regarding monetary policies and the manufacturing industry and services sector PMI data announced in line with the expectations throughout the Euro Zone, started to decline close to the end due to the deteriorating weather in the US stock markets. The FTSE 100 index lost 0.39 percent in the UK, the DAX 30 index lost 1.8 percent in Germany and the CAC 40 index lost 1.66 percent in France. Euro/dollar parity also reached its highest level in a month with 1.0750.
While the news that the authorities wanted banks to give more loans in the face of the ongoing epidemic in China was reflected in the media, it was noteworthy that the government in Japan maintained its assessment of "showing signs of recovery" regarding the economic outlook. Pointing out the importance of exchange rate stability, Japanese Prime Minister Kishida Fumio said that drastic moves are not desired and that he expects the Bank of Japan to reach its inflation target in a stable manner. With these developments, Asian stock markets followed a mixed course close to the close, while the Shanghai composite index in China rose by 0.8 percent, the Hang Seng index in Hong Kong rose by 0.1 percent, while the Nikkei 225 index in Japan lost value by 0.2 percent.
BIST 100 index closed the day at 2,375.00 points with a 0.25% depreciation in Borsa Istanbul, which was followed by a selling trend in the domestic market yesterday. Dollar/TL is traded at 16.1680 at the opening of the interbank market today, after closing at 16.0964 with an increase of 1 percent compared to the previous closing level.
Analysts stated that concerns focused on inflation, growth and further tightening remained on the agenda, adding that volatility in world stock markets continued.
Analysts stated that the minutes of the Fed Open Market Committee (FOMC) meeting will be followed in addition to the news flow from the Davos Summit today, and that the statements of the central bank officials will also be in the focus of investors.
Analysts stated that growth in Germany and durable goods orders in the USA came to the fore on the data agenda today, and noted that technically, 2,350 points in the BIST 100 index were support, and 2.420 and 2.470 levels were resistance.
The data to be followed in the markets today are as follows:
09.00 Germany, 1st quarter GDP
15.30 US durable goods orders for April
21.00 USA, FOMC meeting minutes
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