Australian Market

Australia’s S&P/ASX 200 slipped 0.1%, as heavyweight financial stocks stayed strong for the second consecutive day, but were offset by weakness elsewhere across the index. The financial sector finished 1.4% higher with major banks up between 1.9% and 3.0%, but the energy sector fell 1.0%.

US Market 

U.S. stocks turned sharply higher, a head-spinning reversal after major indexes spent much of the morning deep in negative territory. Stocks tumbled in early trading after new data showed that inflation remains persistently high, strengthening expectations for continued large interest-rate increases from the Federal Reserve. At their lows, the Nasdaq Composite had fallen more than 3%, the S&P 500 had dropped more than 2%, and the Dow Jones Industrial Average had declined nearly 2%, according to Dow Jones Market Data.

Traders appeared to decide that the selling had gone too far. Stocks pared their losses throughout the morning, then turned green shortly after 11 a.m. The S&P 500 gained 2.6% while the Dow Jones Industrial Average ended about 2.8% higher. The Nasdaq Composite advanced 2.2%. “What the market is experiencing is the influences of a lot of short-term traders,” said Tom Galvin, chief investment officer at wealth management firm City National Rochdale. While some traders dumped stocks after the inflation data, “once they were done selling, I think markets started to stabilize.”

Commodities

Gold prices settled slightly lower as Treasury yields climbed in the wake of the stronger-than-expected U.S. CPI data, which supported further aggressive interest-rate hikes by the Fed. A retreat in the U.S. dollar helped dollar-denominated prices for the precious metals pare back their early session losses. Gold futures for December delivery slipped less than 0.1%, to settle at $1,677 per ounce on Comex.

The gold price declined after “hot consumer inflation data, which now puts some odds of the [Federal Open Market Committee] raising rates by a full point at their next meeting” in November, said Peter Spina, president of GoldSeek.com. Hot inflation data “continues to hurt gold as yields rise,” he said.

Oil Futures

Oil futures ended higher for the first time in four sessions, finding support from expectations of tight winter heating-fuel supplies in the wake of a nearly five million-barrel weekly drop in U.S. distillate inventories. Traders also digested the latest stronger-than-expected U.S. inflation reading, the IEA’s warning that OPEC+ supply cuts could tip the global economy into recession, and a bigger-than-expected weekly rise in U.S. crude supplies.

West Texas Intermediate crude for November delivery rose 2.1% to settle at $89.11 a barrel on the New York Mercantile Exchange. December Brent crude climbed by 2.3% to $94.57 a barrel on ICE Futures Europe. “When you step back and you look at this report from the bird’s eye view, the market is starting to get very concerned about distillate supplies – especially as we get closer to winter,” Phil Flynn, senior market analyst at The Price Futures Group, said of the weekly oil-supply data.

Forex

Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$0.9636 to highs near US$0.9803 and was near US$0.9775 at the US close. The
Aussie dollar rose from lows near US61.72 cents to highs near US63.15 cents and was near US62.90 cents at the US close. And the Japanese yen firmed from 147.64 yen per US dollar, near the lowest since August 1990, to JPY146.62 and was near JPY147.25 at the US close.

European Markets

European sharemarkets climbed on Thursday, rebounding from a near two-year low earlier in the session. The continent-wide FTSEurofirst 300 index gained 0.8%, snapping a six-day losing streak. The UK FTSE 100 index added 0.4% as reports emerged that the UK government was discussing making changes to the fiscal plan announced last month that sparked a rout in bond markets.

Asian Markets

Earlier Thursday, Chinese shares ended mixed, as a rise in Covid-19 cases in the country and related lockdown measures continued to weigh on sentiment. Coal miners and property developers declined, while pharma companies advanced. The Shanghai Composite Index dropped 0.3%, but the Shenzhen Composite Index climbed 0.2% and the ChiNext Price Index was 0.3% higher.

Hong Kong’s Hang Seng Index fell 1.9%, extending a losing streak to the sixth session and hitting a fresh 11-year low, as casino stocks and property developers weakened. Covid-19 outbreaks in China raise the prospect of prolonged mobility restrictions. The Nikkei Stock Average lost 0.6%, amid concerns about the global economic outlook and geopolitical tensions. Aviation stocks led losses.