Market Overview
ASX futures were relatively unchanged as of 6:00am on Friday, having gained 2 points or less than 0.1%.
US stocks closed mostly higher Thursday, as chip maker Nvidia lifted the technology sector after posting breakout first-quarter results.
Nvidia’s strong outlook came from the booming demand for artificial intelligence and boosted the Nasdaq Composite to a 1.7% gain with its own 24% rise.
Meanwhile, the S&P 500 advanced 0.9% and the Dow Jones Industrial Average shed 0.1%.
Commodities and Currencies
In commodity markets, Brent crude oil dropped 2.7% to US$76.25 a barrel while gold backtracked 0.9% to US$1,940.22.
Australian government bonds were higher, with the 2 Year yield increasing to 3.58% and the 10 Year yield rising to 3.70%. US Treasury notes were also higher, with the 2 Year yield leaping to 4.53% and the 10 Year yield climbing to 3.82%.
The Australian dollar declined to 65.01 US cents from its previous close of 65.42. The Wall Street Journal Dollar Index ticked up to 98.13.
Asia
Chinese shares ended lower, with market sentiment weighed by the country’s weak economic recovery, worries over local government debt and a stalemate in the US debt ceiling talks.
Media and software stocks dragged on the market. Mango Excellent Media dropped 1.0% and Beijing Kingsoft Office Software retreated 2.1%. Chip makers rose: Hygon Information Technology rose 5.4% and Semiconductor Manufacturing Electronics (Shaoxing) added 0.9%.
The Shanghai Composite Index closed 0.1% lower at 3201.26. The Shenzhen Composite Index dropped 0.2% and the ChiNext Price Index was 0.05% lower.
Hong Kong stocks fell on the last trading day of the week amid concerns over China's weak economic recovery. The Hang Seng Index ended 1.9% lower. The Hang Seng Tech Index dropped 2.25%. XPeng dropped 9.3% and BYD Co. was 5.4% lower.
Japan's Nikkei Stock Average rose 0.4% to 30801.13, led by semiconductor and electronics-related companies. Advantest jumped 16%, Ibiden climbed 9.3%, and Sumco added 3.7%.
India's Sensex gained 0.2% to end at 61872.62. Jubilant FoodWorks added 3.2% and Bajaj Auto rose 2.7%. Tata Motor declined 1.9% and Wipro dropped 1.4%.
Europe
European stocks dropped amid continued uncertainty over US debt ceiling talks. The Stoxx Europe 600 declined 0.2%, CAC 40 and DAX both lost 0.3%.
UK’s FTSE 100 closed down 0.7%, dragged by oil-exposed stocks. Johnson Matthey fell 3.2%, Frasers 3.1%, and Imperial Brands 3%. BP and Shell dropped 2.4% and 2.2%, respectively.
North America
US stocks closed mostly higher Thursday. Nvidia’s breakout earnings boosted the Nasdaq Composite by 1.7% and itself by 24%. The S&P 500 rose 0.9%; the Dow fell 0.1%.
"What is the oil of the future? Semiconductors," said Michelle Cluver of Global X. AMD gained 11%. Taiwan Semiconductor's ADRs surged 12% — its best day since 2008.
Information-technology firms rose 4.5% — the sector's biggest daily gain since November. No other sector in the S&P 500 gained more than 0.5%.
Data showed GDP, personal consumption, and core inflation all came in hotter than expected. Jobless claims rose slightly but remain low.
Fitch placed the US AAA rating on "negative watch" amid political partisanship over the debt ceiling. Short-term bonds are rattled.
Energy, healthcare, and utilities stocks all fell more than 1%. Brent crude’s 2.7% drop to $76.26 dragged oil stocks.
Analysts warn of market fallout if the debt ceiling isn't raised. Still, equities seem resilient. "I'm pleasantly surprised... but I'm still cautious," said Marko Papic of Clocktower Group.
