ASX futures had risen 41 points, or 0.56%, as of 6:00am on Thursday, suggesting a positive start to the day.
Gains for bank shares and a positive debt ceiling update from President Biden helped push US stocks higher on Wednesday, even as concerns about the lingering DC standoff troubled investors.
The major US indices grew for most of the day, especially after Biden's late-morning remarks. The S&P 500 gained 1.2%, the Dow Jones Industrial Average climbed 1.2% and the tech-centric Nasdaq Composite rose 1.3%. The S&P and the Dow are struggling to find their way into positive territory for May while the Nasdaq is up by about 2.2% this month.
Biden said that talks with Republicans have been productive and that he believes an unprecedented US default will be avoided. Treasury Secretary Janet Yellen has warned that without a deal to raise the borrowing cap, the government could run short of funding by two weeks from Thursday.
In commodity markets, Brent crude oil gained 2.6% to US$76.85 a barrel while gold shed 0.3% to US$1,982.54.
Australian government bonds moved up slightly, with the 2 Year yield increasing to 3.29% and the 10 Year yield edging up to 3.43%. US Treasury notes declined, with the 2 Year yield moving down to 4.16% and the 10 Year yield slipping to 3.58%.
The Australian dollar leaned higher to 66.62 US cents from its previous close of 66.53. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, moved up to 96.83.
Asia
Chinese stocks closed lower, with the Shanghai Composite Index down 0.2%.
Hong Kong shares also ended lower. China's disappointing April economic data sparked concerns that the country's post-Covid recovery is losing steam. "The pace of recovery has slowed sharply," but Beijing is likely to announce more supportive measures to boost the economy after the soft April data, Macquarie economists said in a note. The benchmark Hang Seng Index dropped 2.1% to 19560.57. Almost all shares were lower, with developers and tech companies leading losses. Longfor Group Holdings lost 7.1% and Country Garden Holdings fell 5.3%. The Hang Seng Tech Index declined 2.1%, with some big names including Alibaba, Meituan and Xiaomi all retreating more than 3%.
The Nikkei Stock Average of Japan ended 0.8% higher at 30093.59, closing above the 30000 threshold for the first time since September 2021. Chip-related stocks led the day's gains, driven by hopes for earnings growth and a weaker yen. Advantest gained 3.5% and Tokyo Electron climbed 3.3%.
Indian shares ended lower amid broad risk-off sentiment, as investors grew worried over the US debt-ceiling talks and concerns about a potential global recession. China's weaker-than-expected recovery also weighed on momentum. The benchmark Sensex index fell 0.6% to settle at 61560.64. IT-services providers, which are more susceptible to US economic conditions, led declines. HCL Technologies and Tata Consultancy shed 1.5% each and Infosys was 1.3% lower.
Europe
European stocks traded mixed as investors assessed corporate earnings. The pan-European Stoxx Europe 600 fell 0.2%, the French CAC 40 dropped 0.1% and the German DAX rose 0.3%.
In London, the FTSE 100 closed down 0.4% to 7723, as investors' focus on trading updates prompted some of the main decliners. Amid a short list of risers, Melrose Industries closed up 3.9% after the industrial-turnaround specialist issued a new guidance for 2025 with an adjusted operating margin forecast materially ahead of expectations. British Land fell 5.2% and was the worst performer after the property group reported a lower portfolio valuation. JD Sports shares closed down 3.7% after the retailer reported a fall in FY 2023 pretax profit on the back of adjustments.
North America
Gains for bank shares and a positive debt ceiling update from President Biden helped push US stocks higher on Wednesday, even as concerns about the lingering DC standoff troubled investors.
The major US indices grew for most of the day, especially after Biden's late-morning remarks. The S&P 500 gained 1.2%, the Dow Jones Industrial Average climbed 1.2% and the tech-centric Nasdaq Composite rose 1.3%. The S&P and the Dow are struggling to find their way into positive territory for May while the Nasdaq is up by about 2.2% this month.
Biden said that talks with Republicans have been productive and that he believes an unprecedented US default will be avoided. Treasury Secretary Janet Yellen has warned that without a deal to raise the borrowing cap, the government could run short of funding by two weeks from Thursday.
A financial sector update soothed investors. Western Alliance, a regional bank hammered by concerns about its stability, said that deposits have been growing so far this quarter, helping calm jitters about the sector's outlook amid the turmoil that has impacted banks since mid-March. Western Alliance's shares gained 10.2%, a move mirrored in a 7.3% gain for the KBW Nasdaq Regional Banking Index, its largest percentage increase since 2021.
Those two headlines put traders in bullish spirits, said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management. "One of the economic headwinds is supposedly coming off, and the banking system appears a bit more solvent, and that's causing people to buy," Schutte said, adding that his team remains concerned that a recession is approaching.
Among individual stocks, Target shares climbed 2.6%, after the retailer beat analysts' first-quarter profit expectations even though earnings declined year-over year. The big-box stores had investors wincing Tuesday after Home Depot posted worse-than-expected results.
