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Moving markets: Five things shaping the FTSE 100 today

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Moving markets today: China drives Asia downward, bitcoin retreats, Apple’s China iPhone sales decline; focus on UK spring budget and Fed Powell’s testimony 

On Wall Street, stock prices took a sharp downturn, while both bitcoin and gold reached historic highs, capturing the attention of investors who were closely monitoring upcoming economic reports and central bank actions. Across Asian markets, caution prevailed as Chinese stocks slipped, disappointing some investors who were hoping for substantial stimulus measures from Beijing. Following their record highs, both gold and bitcoin experienced a slight decline. British Finance Minister Jeremy Hunt is expected to announce tax cuts for voters on Wednesday, despite concerns about the country’s fragile public finances, in an attempt to boost the Conservative Party’s dim election prospects under Prime Minister Rishi Sunak. Furthermore, ahead of Federal Reserve Chair Jerome Powell’s scheduled testimony before Congress, market sentiment remained subdued. Here are five key takeaways for your day. 

Australian economic growth slows down in December quarter 

Australia’s economy grew slowly in the December quarter due to a squeeze on household incomes, leading to stagnant consumer spending. Data from the Australian Bureau of Statistics revealed a 0.2% rise in real gross domestic product (GDP), below the expected 0.3%. Market expectations are leaning towards a potential interest rate cut. Annual growth dropped to 1.5%, down from the previous quarter’s 2.1%, the lowest since early 2021 during the pandemic-driven recession. 

Apple’s China iPhone sales drop 24% as Huawei surges 

During the first six weeks of 2024, Apple observed a 24% decrease in iPhone sales in China, as reported by research firm Counterpoint. This decline was attributed to intensified competition from domestic brands such as Huawei. Meanwhile, Huawei, considered Apple’s primary competitor in the premium smartphone market in China, recorded a remarkable 64% surge in unit sales within the same timeframe, Reuters reported. 

Bitcoin pulls back following record-breaking surge 

Bitcoin achieved a historic high on Tuesday, with investors channelling funds into U.S. spot exchange-traded cryptocurrency products and anticipating potential global interest rate decreases. The cryptocurrency soared to $69,202, surpassing its previous peak of $68,999.99 in November 2021. Investor interest intensified after the Securities and Exchange Commission greenlit 11 spot bitcoin ETFs in late January. However, its momentum shifted on Wednesday, and it recently declined to $63,047. 

What’s coming up 

Chancellor Jeremy Hunt is set to deliver the Spring Budget to Parliament at 12:30 pm London time, marking a significant economic update ahead of the upcoming general election. According to The Times report on Tuesday, there’s a proposal to lower social security contributions by two percentage points. This change would mean that workers could see an average of £900 more annually, especially when coupled with a similar adjustment made last November. Furthermore, there’s anticipation for an announcement regarding an extension of the freeze on fuel duty.  

Throughout the week, central bankers, including Jay Powell and Christine Lagarde, will be delivering speeches on potential interest rate adjustments. 

Chinese stock market drives Asia into decline 

Stock markets experienced declines across major indices, with the Dow Jones Industrial Average dropping by 1.04% to 38,585.19, the S&P 500 decreasing by 1.02% to 5,078.65, and the Nasdaq Composite witnessing a 1.65% decline to 15,939.59. In Asia-Pacific trading, MSCI’s index, excluding Japan, fell by 0.21%. Japan’s Nikkei N225 slipped by 0.20%, prompted by investors cashing out profits following recent record highs. Chinese stocks also saw losses after Beijing announced a 5% growth target for 2024 without significant stimulus measures during a parliamentary meeting. The CSI 300 Index CSI300 fell by 0.42%, while Hong Kong’s Hang Seng HSI benchmark increased by 0.73%. 

In the bond market, the 10-year U.S. Treasury yield stabilized at 4.162% after hitting a one-month low of 4.112% due to weak data. Bitcoin’s price stood at $63,436, having previously reached $69,202. Gold prices dipped slightly to $2,125.36 per ounce after hitting an all-time high of $2,141.59. U.S. crude oil prices fell to $78.07 per barrel, while Brent crude stood at $81.93, down 0.13% for the day.

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