OPENING CALL: The Australian share market is expected to open up. The SPI200 futures contract expected to open up 22 points.
The European Central Bank cut its key interest rate and launched a sweeping package of bond purchases Thursday that lays the ground work for a long period of ultraloose monetary policy, jolting European financial markets and triggering an immediate response from President Trump.
The U.S. budget gap widened to more than $1 trillion in the first 11 months of the fiscal year, the first time deficits have topped that mark since 2012.
Overnight Summary
Each Market in Focus
Australian shares pared an early morning surge through the afternoon, though fairly broad gains still helped the market to a second straight advance.
The S&P/ASX 200 settled 0.3% higher at 6654.9, the highest close in about six weeks. Property trusts logged the biggest gains, recovering from weakness in the past two days while the big banks continued to climb.
BHP, Rio Tinto and Fortescue Metals also built on recent gains as iron-ore prices remain buoyant, though South32 slipped 0.7% as it traded ex-dividend. The energy sector fell 1.2% after an overnight retreat in crude prices.
Stocks climbed intraday after the European Central Bank unveiled a sweeping stimulus package and trade tensions between the U.S. and China showed signs of easing.
The Dow Jones Industrial Average rose 133 points, or 0.5%, on track to extend its winning streak to seven sessions, while the S&P 500 increased 0.6%. Both indexes are within 1% of July’s all-time highs. The technology-heavy Nasdaq Composite rose 0.6%.
Investors have been preoccupied in recent weeks with signs of slowing global growth and uncertainty over the long-simmering trade war with China. The Federal Reserve is expected to follow the ECB next week in cutting interest rates to cushion the economy from a
global slowdown.
Recent stock-market gains show investors are focusing on the healthy fundamentals of the U.S. economy, said Sandip Bhagat, chief investment officer at Whittier Trust, who said he has been overweight stocks over the past two years, meaning he holds a larger position than the benchmark the firm tracks.
Gold futures marked a second consecutive gain after the European Central Bank cut eurozone interest rates and delivered a batch of measures intended to boost the region’s sluggish economy – bullish moves for bullion.
The ECB cut its deposit rate further into negative territory, decreasing it by 10 basis points to negative 0.5%, while also announcing it would restart its monthly bond-buying program as it attempts to juice inflation and European expansion.
December gold on Comex gained $4.20 an ounce, or 0.3%, to settle at $1,507.40 an ounce after rising by 0.3% Wednesday. Silver for December delivery, meanwhile, added nearly a penny, or 0.04%, at $18.177 an ounce, after giving up less than 0.1% a day ago.
In other commodity markets, September wheat prices were up 8 1/4 cents at $4.85 3/4 x/x cents.
October West Texas Intermediate oil fell 66 cents, or 1.2%, to settle at $55.09 a barrel on the New York Mercantile Exchange. That was the lowest finish since Sept. 3, FactSet data show.
The WSJ Dollar Index was recently down 0.22% at 91.26.
Earlier in the day, the dollar was supported by Labor Department data showing core inflation rose more than economists had expected last month, climbing 0.3% from the month before and 2.4% from the year before.
Some investors say faster inflation readings could encourage the Federal Reserve to announce a limited scope for future rate cuts at the meeting next week. Policy makers are widely expected to reduce rates for a second time this year.
The Stoxx Europe 600 Index finished the day up 0.77 point, or 0.20%, to 390.48. The FTSE 100 closed in the green, finishing up by 0.09%. Wm. Morrison Supermarkets led the index, closing up 4.7% after posting a 49% rise in first-half pretax profit.
Meanwhile, the French CAC-40 Index was up 24.80 points, or 0.44%, to 5642.86 while the German DAX was up 51.18 points, or 0.41%, to 12410.25.
Stocks were broadly higher across Asia, with the Shanghai Composite up 0.6% and Japan’s Nikkei up 0.8%.
Hong Kong’s Hang Seng was an outlier, slipping 0.1%.
Japanese stocks close higher as machinery and electronics stocks rose on easing fears around the U.S.-China trade war. The Nikkei Stock Average roses to 21759.61.
Hong Kong stocks closed lower, with the Hang Seng Index down at 27087.63, as local banks and property developers dragged and some of the sectors’ stocks swung to the red after being among the previous session’s top gainers.
Malaysian stocks lost steam from morning gains to close lower, weighed by profit taking of some blue chips. The Kuala Lumpur Composite Index closed 0.1% lower at 1601.00.
The weaker performance comes after Malaysia’s central bank kept its key interest rate unchanged, a disappointment to some who wish for a further boost to the economy.
Singapore stocks ended lower, amid news that retail sales in the country fell for a sixth straight month in July. The FTSE Straits Times Index ended down 0.3% at 3194.96, weighed by most property and conglomerate stocks. And Indian shares closed lower, with the benchmark Sensex ending 0.5% down at 37104.28,
as investors remained cautious ahead of the European Central Bank’s policy meeting.
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