Moving markets today: Asian stocks rise on Wall Street momentum and China’s property stimulus; oil prices up amid Iran helicopter crash; US Federal Reserve minutes and Nvidia Q1 earnings in spotlight
Asian stocks kicked off the week by reaching their highest levels in two years on Monday, thanks to China’s significant efforts to tackle its property market issues and expectations of global interest rate cuts in the near future. The dollar stabilized after experiencing a decline last week. Investors are closely monitoring the aftermath of a helicopter crash involving Iranian President Ebrahim Raisi, which occurred in dense fog. Oil prices rose in early trading, driven by the search for Iran’s president and the US purchasing crude to replenish its national reserves. Gold prices soared to a new high on Monday, supported by strong US economic data from last week that reinforced expectations of Federal Reserve interest rate cuts. China’s central bank opted to keep its benchmark lending rates unchanged and announced a $42 billion package of measures to support the struggling property market. Traders are focusing on various events this week, including European economic data, inflation updates from the UK, Canada, and Japan, central bank decisions in New Zealand, Indonesia, South Korea, and Chile, Nvidia Corp. earnings, and the release of meeting minutes from Australia’s central bank and the Federal Reserve. Additionally, global PMIs are on the radar for investors. Here are five key takeaways for your day.
Iranian president’s helicopter crashes; oil prices rise
On Sunday, Iranian President Ebrahim Raisi was involved in a helicopter crash in the mountainous northwest region of the country, according to Iranian officials who didn’t provide details on his condition. State media shared footage of ambulances navigating through thick fog along a mountain road. The crash site was reported to be in the Arasbaran Forest near the Azerbaijan border.
Pir-Hossein Kolivand, head of Iran Red Crescent, mentioned that 40 rapid response teams were sent to search the area. Earlier drone attempts to locate the crash site failed due to harsh weather and difficult terrain.
“President Raisi’s helicopter was completely burned in the crash … unfortunately, all passengers are feared dead,” the official told Reuters.
Following the incident, oil prices saw an increase in early Asian trading on Monday, with Brent crude rising by 0.3 per cent to $84.24 a barrel, and US West Texas Intermediate crude gaining 0.2 per cent to $80.21 a barrel.
China’s central bank holds LPRs, unveils property market support plan
China’s central bank kept its benchmark lending rates steady during Monday’s monthly review, with the one-year loan prime rate (LPR) remaining at 3.45 per cent and the five-year LPR at 3.95 per cent. To boost sluggish property demand, the central bank announced on Friday that it will lower mortgage interest rates and down-payment requirements for homebuyers.
Most loans in China are linked to the one-year LPR, while the five-year rate primarily affects mortgage rates.
Deputy Governor Tao Ling of the People’s Bank of China revealed that the central bank will provide 300 billion yuan to financial institutions. This funding will help local state-owned enterprises purchase unsold, completed apartments.
UK home asking prices reach record high: Rightmove
Home prices in Britain have reached new highs, even with mortgage costs remaining steep, but the rate of increase has slowed down, as reported by property website Rightmove. In the four weeks leading up to mid-May, the average asking price for homes climbed to £375,131. However, the 0.8 per cent monthly rise was the smallest so far in 2024. Compared to the same period last year, prices were only 0.6 per cent higher. Rightmove highlighted that the most substantial annual price increase of 1.3 per cent was seen in the high-end market, Reuters reported.
Key events to watch this week
This week, traders will be watching economic activity data from Europe and inflation reports from the UK, Canada, and Japan. Key policy decisions are expected from central banks in New Zealand, Indonesia, South Korea, and Chile. Nvidia Corp. is also set to release its earnings. Meeting minutes from Australia’s central bank and the Federal Reserve will be published, and flash global PMIs are due.
In corporate developments, shareholder votes will be prominent. Virgin Money will hold a meeting to decide on a takeover bid from Nationwide, and investors in Indivior, a drugmaker based in Virginia, will vote on shifting its primary listing to New York. In the earnings sector, retail is a major theme, with Marks and Spencer in the UK and Target in the US set to report their results. Further details follow below, the FT reported.
Asian stocks climb following Wall Street gains and China’s property market support
Asian stocks saw mostly positive movement in early trading, buoyed by robust corporate earnings in the US and measures by China to bolster its property market. Markets in Australia and Japan experienced gains, and futures for Hong Kong suggested a strong start on Monday.
Similarly, US stock futures inched up following Friday’s climb of the S&P 500 Index and a historic close of the Dow Jones Industrial Average above 40,000.
Specifically, South Korea’s Kospi index rose by 0.7 per cent, while Japan’s Topix increased by 0.4 per cent. The South Korean won slipped by 0.2 per cent against the dollar to 1,355.02 won, and the yen dropped 0.1 per cent to 155.85 yen.
In the commodities market, gold prices reached new heights, with spot gold rising 0.74 per cent to $2,432.70 per ounce, having peaked at $2,440.49 earlier in the session. Meanwhile, Bitcoin saw a decline of about 1 per cent, trading at $65,863.