The FTSE/JSE All Share Index rebounded from Wednesday's losses, climbing nearly 1% on Thursday to surpass 81 600. This recovery was bolstered by a notable 2.40% rise in resource-linked stocks. Meanwhile, global markets reacted to an unexpected uptick in core consumer prices in the US, which tempered expectations for a more substantial interest rate cut by the Federal Reserve next week. Investors are now closely watching forthcoming US economic data, including weekly jobless claims and producer price index figures, as these could significantly impact the Fed's policy decisions.
In the US, Wall Street's three major indices oscillated between modest gains and losses on Thursday. This volatility followed a report revealing a slightly higher-than-expected increase in factory gate prices. The headline Producer Price Index (PPI) rose by 0.20% month-over-month, while the core PPI exceeded forecasts with a 0.30% increase. However, previous month's figures were revised downward, and annual rates were lower than anticipated. Both initial and continuing jobless claims were in line with forecasts. Traders remain largely confident that the Fed will implement a 25 basis point rate cut next week, with probabilities for this move standing at approximately 87%. The communication services sector led gains, while technology stocks underperformed.
In the UK, stocks showed positive movement on Thursday, with the FTSE 100 closing around 0.60% higher at 8 240. This recovery halted two consecutive days of declines and aligned with regional trends. Investors factored in the latest US producer and inflation data, which reinforced expectations for a 25 basis point rate cut by the Fed. Concurrently, the European Central Bank (ECB) enacted a widely anticipated 25 basis point rate cut and emphasised that future monetary policy decisions in the eurozone would remain data-dependent. Intermediate Capital Group was the top performer, surging 4.50%, followed by Sage, which rose 4.10%.
In the Eurozone, stock indices also saw gains, with the Stoxx 50 and Stoxx 600 both increasing by approximately 0.80%. This positive reaction came after the ECB's decision to lower rates by 25 basis points, marking its second rate cut this year. The ECB’s key rate now stands at 3.50%, though no indications were given regarding future rate changes. Major regional indices ended in positive territory, driven by a 2% rise in technology stocks and a 2.40% increase in mining stocks. Novo Nordisk (CSE:NOVOb) saw its shares climb 2.66% on news that its new anti-obesity pill may outperform existing treatments.
In Asia, stock performance was mixed. The Japanese Nikkei 225 Index surged 3.41% to close at 36 833, while the broader Topix Index gained 2.44% to 2 593. These gains reversed earlier losses and mirrored a tech-led rally on Wall Street overnight. These movements occurred despite a mixed US consumer inflation report, which solidified expectations for a modest 25 basis point rate cut by the Fed next week. Domestically, Japanese data indicated that producer prices in August rose less than expected, although business sentiment improved in the third quarter.
Conversely, the Chinese market struggled, with the Shanghai Composite falling 0.17% to close at 2 717 and the Shenzhen Component dropping 0.63% to 8 054. Both indices hovered near seven-month lows due to persistent weak sentiment in China. Recent economic data showed no clear signs of recovery, and the authorities' attempts to bolster investor confidence through stronger policy measures have yet to yield significant results. Geopolitical risks and trade tensions with major economies further exacerbated the negative sentiment.
In commodities, gold remained steady near $2 510 per ounce on Thursday, as markets continued to digest the latest US consumer inflation data and adjust expectations for a smaller rate cut by the Fed. WTI crude oil futures also saw a rise of over 3%, trading above $69 per barrel. This increase was driven by disruptions caused by Storm Francine, which led to the shutdown of approximately 670 000 barrels per day in the Gulf of Mexico—over a third of the region's oil output.
