US tech giants fuel global stock market rally

May 15, 2024 (MLN): Global equities are set for a fresh record after a big tech-led rally in US gauges, with investors awaiting key inflation data for clues on the Federal Reserve’s policy, as Bloomberg reported.

The MSCI All Country World Index climbed, extending its longest run since January.

A gauge for benchmarks in Asia gained after closing at a two-year high Tuesday, with Taiwan Semiconductor Manufacturing Co. leading the advance.

Shares in Japan and Australia rose while those in mainland China slipped.

Hong Kong markets are closed for a holiday.

Tencent Holdings Ltd.’s American Depositary Receipts surged after the company’s revenue beat estimates in results reported late Tuesday, while Alibaba Group Holding Ltd.’s slid on a profit plunge, highlighting the growing divergence between China’s twin Internet powerhouses.

Elsewhere, shares of Hon Hai Precision Industry Co. dropped after reporting a weaker-than-expected profit as demand for iPhones remained sluggish in China.

In the run-up to US consumer price index data, the S&P 500 shrugged off Jerome Powell’s signals that interest rates will be higher for longer and a mixed reading on producer inflation.

US futures were little changed in early Asia trading.

“Market sentiment hinges on tonight’s US CPI report,” said Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “While promising, if it were to occur and represent a more than three-year low for core CPI, a greater downside surprise would be required to dispel fears about sticky and re-anchored inflation.”

In China, the nation’s central bank extended a key policy loan at the same borrowing cost, signaling concerns that fresh monetary easing may further weaken the yuan.

The country is also considering a proposal to have local governments across the country buy millions of unsold homes, people familiar with the matter said, in what would be one of its most ambitious attempts yet to salvage the beleaguered property market.

Investors will also be watching to see if Japan’s 10-year government bond yield hits the highest level in more than a decade, after 20-year yields did so Tuesday.

The yen was steady ahead of a report on Thursday that is forecast to show Japan’s gross domestic product shrank at an annualized pace of 1.2% in the three months through March.

In the corporate world, Sony Group Corp.’s shares climbed as investors rewarded its mid-term plan and shareholder return policy after the company announced its quarterly earnings.

Copyright Mettis Link News