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Stocks rally to records on Iran peace hopes

Global equity markets were buoyant to start Thursday, with Japan’s Nikkei 225 reaching a new record high and most Asian indices advancing as hopes for progress in US‑Iran peace talks supported risk appetite and oil price volatility eased. Sentiment was further underpinned by stronger‑than‑expected first‑quarter growth figures from China, which showed the economy accelerating despite ongoing domestic demand and property‑sector headwinds. On Wall Street, the S&P 500 and Nasdaq 100 closed at fresh record highs on Wednesday on the back of artificial‑intelligence optimism and solid US bank earnings. The US Dollar Index was stable near multi-week lows, Treasury yields were slightly lower and gold prices gained mildly, trading around USD 4830 per ounce.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

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Japan’s Nikkei 225 index climbed 2.6% on Thursday to a new record, led by technology and consumer cyclical stocks, as growing expectations of a US‑Iran peace deal lifted risk appetite across Asia. Activist pressure on air‑conditioning maker Daikin Industries from Elliott Investment Management helped drive gains. Regional markets were mostly higher, with South Korea’s Kospi up about 1.9% and India’s Nifty 50 gaining roughly 0.3%. Australia’s S&P/ASX 200 slipped 0.4% after labour data showed annual employment growth of 1.4% in March and an unchanged 4.3% unemployment rate. West Texas Intermediate was hovering near USD 92 per barrel and Brent crude was trading just below USD 95, as investors weighed signs that Washington and Tehran may hold a second round of talks, while record closes for the S&P 500 and Nasdaq overnight underscored optimism that the Iran war could soon end.

China growth accelerates but risks rise

Hong Kong’s Hang Seng Index was up 1.4% and mainland China’s CSI 300 was 0.7% higher after data on Thursday showed China’s gross domestic product expanded 5% in the first quarter, up from 4.5% in the previous quarter and above market expectations, as strong exports offset weak domestic demand. Industrial production rose 6.1% in the quarter year-on-year, outpacing retail sales growth of 2.4%, while March industrial output increased 5.7% from a year earlier compared with 6.3% in February, underlining the economy’s continued reliance on manufacturing and exports. Retail sales grew 1.7% year-on-year in March, slowing from a holiday‑driven 2.8% in February, and fixed‑asset investment climbed 1.7% in the first quarter, as a persistent property slump saw real estate investment fall 11.2% after a 9.9% decline a year earlier.

US tech indices reach new records

US equities saw further gains on Wednesday as optimism over artificial intelligence and hopes for extended US‑Iran ceasefire talks drove the technology sector, lifting both the S&P 500 and Nasdaq 100 to record highs, while the Dow Jones Industrial Average edged lower. The S&P 500 rose 0.8% to close at 7022.95 points after touching 7026 intraday, and the Nasdaq 100 advanced 1.4% to 26,204.58 points, whereas the Dow slipped 0.15% to 48,463.72 points as cyclical industrial names such as Caterpillar, which lost 3%, lagged. Bank shares also supported sentiment, with Morgan Stanley gaining 4.5% and Bank of America up 1.8% after both lenders reported better‑than‑expected quarterly results, including stronger net interest income at Bank of America and robust equity trading revenue at Morgan Stanley. Among major technology names, electric vehicle maker Tesla jumped 7.6% and Microsoft climbed 4.6%, while chip group Broadcom gained 4.2% and software firm Gitlab surged 8.4% after announcing expanded artificial intelligence collaborations with Facebook parent company Meta Platforms and Google Cloud, respectively.

European stocks struggle to follow Wall Street

European equities were mixed on Wednesday despite record highs on Wall Street, as investors weighed geopolitical risks and corporate news flow. The Euro Stoxx 50 fell 0.7%, France’s CAC 40 lost 0.6% and Switzerland’s SMI slipped 0.3%, while Germany’s DAX bucked the trend with a modest 0.1% gain. In macroeconomic data, Eurostat reported on Wednesday that seasonally adjusted industrial production rose by 0.4% in February in both the euro area and the EU, partially offsetting declines of 0.8% and 0.9%, respectively, in January. Compared with the same month last year, output fell by 0.6% in the euro area and by 0.1% in the EU, with euro-area production indices at 97.9 and 99.7, respectively, on a 2021 base of 100.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Abbott Laboratories, Netflix, PepsiCo, Pernod Ricard, Prologis, and TSMC.

Economic data in focus: UK gross domestic product (08:00), Swiss Producer Price Index (08:30), euro-area Consumer Price Index (11:00), Bundesbank monthly report (12:00), US weekly initial jobless claims (14:30), Philly Fed Manufacturing Index (14:30), US manufacturing production (15:15).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.