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Stocks steady as central banks take centre stage

Equity markets showed limited direction at the end of the week as investors weighed fresh interest rate moves and awaited key inflation data. In Asia, Japanese stocks underperformed on Friday with the Nikkei retreating as weaker household spending data reinforced expectations of a Bank of Japan (BOJ) rate increase later this month, while most other regional markets traded higher. India’s central bank cut its key policy rate in a unanimous decision on Thursday, citing signs of slowing economic momentum. On Wall Street, major US indices paused after their recent rally as traders looked ahead to next week’s Federal Reserve (Fed) meeting, where markets are pricing in another rate cut, and digested stronger-than-expected labour market data. European equities extended their recovery on Thursday, driven by auto stocks. US personal consumption expenditures and consumer sentiment data due in focus later on Friday.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

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Japanese equities underperformed in Asia on Friday as the Nikkei 225 fell 1.1% at 50,450.50 points, erasing this week’s gains, after weaker-than-expected household spending data reinforced the drag from inflation and strengthened expectations of a BOJ rate increase later this month. The yield on 10‑year Japanese government bonds briefly touched its highest level since mid‑2007 and was heading for its sharpest weekly rise since March, although recent strong auctions indicated that higher yields are attracting buyers. Korea’s Kospi was trading 1.6% higher at 4093.83 points and Australia’s S&P/ASX 200 was 0.2% higher at 8634.60 points. Hong Kong’s Hang Seng Index was trading 0.3% higher at 26,013.50 points, while mainland China’s CSI 300 was up 1% at 4591.94 points. Gold prices were trading firmer around USD 4220 per ounce on Friday, while bitcoin was somewhat lower around USD 92,000.

India cuts policy rate as growth slows

India’s central bank reduced its key interest rate by 0.25 percentage points to 5.25% on Thursday, in a unanimous decision that aligned with market forecasts and reflected "weakness in some key economic indicators" despite subdued inflation. The Reserve Bank of India noted that gross domestic product expanded 8.2% year-on-year between July and September, but pointed to softer momentum, with industrial activity in October falling to a 14‑month low and manufacturing PMI slipping to a nine‑month low in November. Exports to the US declined 8.5% year-on-year in October to USD 6.3 billion and total exports fell 11.8% to USD 34.38 billion, as US tariffs of 50% on Indian goods introduced in August weighed on external demand.

US equities pause after rally

US stock indices ended Thursday’s session little changed after their recent rebound, as investors awaited next week’s Fed meeting, where the market now expects an interest rate cut. The Dow Jones Industrial Average slipped 0.1% to 47,850.94 points and the Nasdaq 100 eased 0.1% to 25,581.70 points, while the broader S&P 500 edged up 0.1% to 6857.12 points. Shares in social media group Meta rose 3.4% after reports that it plans to scale back spending on its metaverse ambitions and redirect resources towards artificial intelligence, which also supported chipmaker Nvidia with a 2.2% gain. In the software sector, Salesforce advanced 3.7% on a more upbeat sales outlook driven by AI demand, while cloud specialist Snowflake slumped more than 11% after issuing an operating margin forecast that fell short of analyst expectations.

US jobless claims fall sharply

US initial jobless claims dropped by 27,000 to a seasonally adjusted 191,000 in the week ending Thursday 29 November, the lowest reading since September 2022 and well below economists’ projections, according to Labor Department data released on Thursday. Continuing claims, which act as a proxy for hiring, declined by 4,000 to 1.939 million. Separate figures from outplacement firm Challenger, Gray & Christmas showed planned layoffs by US-based employers dropped 53% to 71,321 in November, although total announced job cuts so far this year have risen 54% to about 1.171 million compared with the same period in 2024, largely concentrated in the technology sector as companies roll out artificial intelligence. The US labour market has been in a "no fire, no hire" phase, with elevated continuing claims, weak hiring intentions and a jobless rate that rose to 4.4% in September likely to feature in Fed discussions on interest rates when policymakers meet next week.

Euro-area stocks supported by carmakers

European equities extended their rebound on Thursday, with the euro area’s EuroStoxx 50 rising 0.4% to 5718.05 points as investors continued to price in another Fed rate cut next week and monitored diplomatic efforts in Florida to advance peace talks between Ukraine and the United States. Auto stocks were the main driver, helped by a positive sector outlook from Bank of America and by US President Donald Trump’s plans to relax fuel consumption standards, lifting Mercedes-Benz and BMW by up to 4.5% and Renault by 6.4%, while Stellantis was seen benefiting from potentially softer emissions rules in both Europe and the US. Germany’s DAX climbed 0.8% to 23,882.03 points and France’s CAC 40 added 0.4% to 8122.03 points, while Switzerland’s SMI advanced 0.4% to 12,910.44 points.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: euro-area gross domestic product (11:00), Canadian unemployment rate (14:30), US personal consumption expenditures (16:00) and University of Michigan Consumer Sentiment Index (16:00).

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