US stocks trimmed earlier gains on Thursday afternoon following their worst sessions since 2022. Investors continued to sell some of this year's top tech stocks for a second day, doubting the sustainability of the AI-driven rally. The S&P 500 flatlined, the Nasdaq slipped by 0.10%, while the Dow rose by over 200 points. Earlier gains were bolstered by a better-than-expected 2.80% growth in US GDP for the second quarter as shown by preliminary estimates, supporting the belief that the Federal Reserve can manage inflation without damaging the economy.
European stocks fell sharply on Thursday, continuing the selloff from the previous session due to a series of disappointing corporate earnings reports. The Eurozone’s STOXX 50 dropped 1%, closing at 4 812, its lowest level since February, while the pan-European STOXX 600 declined by 0.70%, ending the day at 509, the lowest since May. Trading Economics reported that: “Stellantis (NYSE:STLA) sank 9% after posting disappointing first-half results and announcing that it will bring back old models, in addition to considering price cuts to adapt to a weakening consumer. Additionally, Kering (EPA:PRTP) lost 7% to a seven-year low after posting weaker results and poor guidance, mirroring similar developments for other luxury giants this week amid softer demand in China. Additionally, ASML (AS:ASML) extended its bearish momentum and closed 4% lower, a 20% slump in the last two weeks, tracking the plunge for the Nasdaq 100 overnight as markets continued to assess whether the AI-led rally for chips has gone too far.”
Chinese stocks declined on Thursday, with mainland markets reaching new five-month lows. This downturn occurred despite China's central bank's surprise interest rate cut, as global market pressures took precedence. The People's Bank of China unexpectedly reduced its one-year medium-term lending facility (MLF) rate by 20 basis points to 2.30%. This off-schedule cut followed a decision to keep the MLF unchanged earlier this month, representing the largest reduction since April 2020.
The FTSE/JSE All Share Index reversed early losses to close 0.10% higher at 80 678 on Thursday, buoyed by a recovery in financial sector shares. Standard Bank (JO:SBKJ) and Firstrand (JO:FSRJ) led the gains, with increases of 3% and 2.50%, respectively. In contrast, the mining sector saw significant declines, with AngloGold Ashanti (JO:ANGJ) falling 4.90% and Gold Fields (JO:GFIJ) dropping 4.70%. In economic news, the annual producer price inflation in South Africa remained unchanged at 4.60% in June 2024, same as the previous month. At 18h30, the rand was little changed at R18.3/$, while it firmed 0.27% to R19.90/€ and it weakened 0.15% to R23.61/£ according to Business Day.
In the commodities market, gold fell 1.33% to $2 365.57/oz and platinum 1.61% to $934.4/oz. Brent crude was 0.49% firmer at $81.86 a barrel.
