LGT Navigator

Australian stocks rise despite further rate hike

Australian equities edged higher on Tuesday even as the country’s central bank tightened monetary policy again to contain persistent inflation. Elsewhere in Asia, shares were generally lower as Apple’s disappointing outlook compounded worries about the profitability of technology investment. Wall Street ended Monday mixed, with technology stocks under pressure, while most major European indices advanced. US midterm elections dominate investor attention as voters head to the polls on Tuesday, with control of Congress at stake and implications for US President Donald Trump’s ability to advance his tax and spending agenda.

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

Reserve Bank of Australia
© Shutterstock

Australia raises interest rates to 18-year high

The Reserve Bank of Australia increased its cash rate by 25 basis points to 4.85% on Tuesday, its highest level since 2008, delivering an expected fifth increase this year in a six-to-three vote. Annual consumer price inflation accelerated to 4.3% in September from 4% in August, reflecting higher fuel and commodity costs alongside technology price pressures linked to artificial intelligence investment. The central bank now forecasts inflation will return to its 2–3% target range only in late 2027, three quarters later than previously anticipated. The tightening comes despite slowing economic growth, with annual GDP growth easing to 2.1% in the second quarter from 2.5% in the first. Australia’s S&P/ASX 200 rose 0.3% on Tuesday.

China raises foreign exchange reserve requirement

The People’s Bank of China announced on Tuesday that banks’ reserve requirement for foreign currency deposits will rise to 6% from 4%, effective 15 November. The central bank said the increase would improve foreign exchange liquidity management, requiring banks to hold more foreign currency with it and reducing domestic US dollar availability. The decision follows the yuan’s rise to its strongest level in more than four years in October, raising concerns about pressure on Chinese exports. The US dollar gained 0.3% against the yuan to 6.6706 following the announcement. On Tuesday, mainland China’s CSI 300 fell 0.2%, while Hong Kong’s Hang Seng Index gained 0.2%.

Asian stocks fall on technology concerns

Most Asian equity markets declined on Tuesday, led by a nearly 4% fall in South Korea’s KOSPI, as Apple’s outlook and uncertainty ahead of the US midterm elections weighed on sentiment. The iPhone maker projected weaker holiday-quarter margins because of rising memory-chip costs and services revenue growth below analysts’ expectations, reinforcing concerns about returns on technology investment. The MSCI AC Asia Pacific Index fell 1.2% on Tuesday, while India’s Nifty 50 bucked the trend, rising 1%. Japanese markets were closed for a public holiday.

US technology stocks extend losses

The Nasdaq 100 fell 1.4% to 27,989.82 points on Monday, recording its third consecutive decline ahead of Apple’s earnings release and Tuesday’s US midterm elections. The S&P 500 dropped 0.5% to 7541.40 points, while the Dow Jones Industrial Average gained 0.4% to 51,983.98 points. Concerns over substantial artificial intelligence investment weighed on technology stocks, with falling oil prices providing insufficient support for a sustained recovery. Chipmaker Marvell Technology declined 12.7% after confirming its USD 115 billion all-share acquisition of laser specialist Lumentum, including debt, while software group Oracle lost 8.8% after disclosing plans to issue around USD 10 billion in new shares. US Treasury yields recovered slightly after a recent drop, with the two-year yield at 4.6% and the ten-year yield at 4.9%.

Euro-area manufacturing expansion eases as costs rise

The S&P Global euro-area manufacturing Purchasing Managers’ Index edged down to 52.7 points in October from 52.9 in September, according to data released on Monday, indicating a ninth consecutive month of expansion. The output index declined to 52.8 from 53.6 as new order growth weakened, despite exports recording their strongest increase in more than four years. Manufacturing activity improved in six of the eight countries surveyed, while France and Italy slipped back into contraction and employment across the region increased for a third consecutive month. Longer supplier delivery times and higher energy prices pushed input cost inflation to a five-month high, which S&P Global said increased pressure on the European Central Bank to raise interest rates further. At Monday’s close, the Euro Stoxx 50 rose 0.8%, Germany’s DAX gained 0.6% and France’s CAC 40 advanced 1%, while the Swiss Market Index slipped 0.1%.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from AMD, Amgen, Bayer, Booking Holdings, Eaton, Ferrari, and Pfizer.

Economic data in focus: Swiss Consumer Price Index (08:30), US Job Openings and Labor Turnover Survey (16:00), US durable goods orders (16:00).

LGT helps you make informed investment decisions

Global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

LGT Navigator US midterms, AI earnings in focus Tous les articles
Déconnexion
Inspirés par l'avenir depuis des générations
Nos newsletters - automatiquement up to date

Les newsletters LGT vous informent régulièrement sur les insights et les nouveautés dans les domaines de l'économie, de la finance et bien plus encore.

Inscription à la newsletter
Follow us
Scaling impact LGT Venture Philanthropy