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Tech optimism lifts global equities

Technology shares continued to drive market gains at the start of the week, as rising expectations for a December US rate cut and renewed confidence in artificial intelligence boosted sentiment globally. US tech stocks rallied strongly on Monday, fuelled by enthusiasm for Alphabet’s latest AI advances, while positive news from Alibaba’s AI tool launch further supported the sector and carried over into Asia, where markets posted modest gains on Tuesday. European shares also edged higher, recovering part of last week’s losses, even as soft German macroeconomic data and mixed corporate developments kept advances in check. Gold prices were somewhat higher, trading around USD 4140 per ounce, while bitcoin also saw gains, trading near USD 88,100.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Market numbers
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Shares across major Asian markets saw mild gains on Tuesday, supported by a recovery in technology stocks following a rally in US peers and strengthened expectations for a Federal Reserve interest rate cut in December. Japan’s Nikkei 225 was trading up 0.1%, while Korea’s Kospi rose 0.3% and Australia’s S&P/ASX 200 gained 0.1%. Hong Kong’s Hang Seng Index advanced 0.3%, and mainland China’s CSI 300 was trading 1% higher. Optimism over new artificial intelligence developments at Google - whose AI tool Gemini and in-house AI chips have recently seen major advances, according to media reports - boosted confidence in its future innovation and competitiveness in the industry. Alibaba’s strong AI app debut also underpinned sector sentiment. Despite the gains, regional advances were restrained by ongoing fiscal concerns in Japan and diplomatic tensions with China, which weighed on Japanese share prices.

US tech shares rally on rate hopes

Technology stocks led gains at US exchanges on Monday, as statements from Federal Reserve officials increased expectations of an interest rate cut in December. The Nasdaq 100 surged 2.6% to 24,871.46 points and the S&P 500 rose 1.6% to 6705.12 points, while the Dow Jones Industrial gained 0.4%, although all three indices remain lower for November so far. The CBOE Volatility Index (VIX) sank 12.4%, signalling easing market fears. Strong performances from Alphabet, up 6.3% on Gemini AI optimism, and Alibaba, up 5.1% after its AI tool reached ten million downloads, highlighted ongoing competition between the US and China in artificial intelligence.

European shares edge higher on US boost

European equities recovered part of their recent losses on Monday: The Euro Stoxx 50 rose 0.2% to 5526.05 points, after falling to the lowest level since September late last week. Germany’s DAX advanced 0.6%, and Switzerland’s SMI climbed 0.4%. However, France’s CAC 40 slipped 0.3%. Automotive stocks outperformed after Goldman Sachs suggested premium names remain undervalued, while defence sector shares declined amid progress on Ukraine peace talks. Novo Nordisk shares dropped 5.6% after disappointing Alzheimer’s drug trial results.

German business sentiment weakens in November

German business morale deteriorated in November, with the Ifo business climate index dropping to 88.1 from 88.4 in October, falling short of the market's expectations. Despite a more positive assessment of the current situation, firms have grown less confident about an imminent recovery after two years of contraction, according to Ifo. Sector declines were widespread except for services, and recent purchasing managers’ data also indicate that private sector momentum in Germany has slowed. The market anticipates only modest growth for Europe’s largest economy this year, with more robust expansion hoped for next year as increased government infrastructure and defence spending provides support.

Swiss services sector drives slight employment gain

Switzerland saw overall employment edge up by 0.1% in the third quarter, reaching 5.532 million jobs, according to Federal Statistical Office figures published on Monday. The increase was led by the services sector, which added 10,400 jobs, or 0.2% year on year, while industry shed 7600 positions, down 0.7% from a year earlier. Companies reported 10.5% fewer vacancies and faced less difficulty finding skilled staff, with only 36.3% reporting recruitment challenges, 1.7 percentage points less than last year. Employment expectations have softened, but the outlook indicator remains positive at 1.02 despite a 0.9% decline.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Alibaba.

Economic data in focus: German gross domestic product (08:00), US ADP National Employment Report (14:15), US Producer Price Index (14:30), US retail sales (14:30) and Conference Board Consumer Confidence Index (16:00).

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Editor: Alessandro Fezzi
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