World oil prices jumped today on fresh moves by China to boost its economy and as traders tracked an uncertain future for Syria and the wider crude-rich Middle East.
Major stock markets diverged as investors reacted to political crises in South Korea and France, and tracked the perspectives for interest rate cuts, reports AFP.
Gold, seen as a haven investment, gained around one percent.
“The week has kicked off on a largely upbeat tone following the welcome announcement that Chinese authorities plan to enact further stimulus over the year ahead,” noted Joshua Mahony, analyst at traders Scope Markets.
“This shift has already fuelled sharp gains in key assets, with the Hang Seng surging 2.8 percent and commodities like copper, zinc, iron ore, and palladium rallying on expectations of increased demand.”
Oil prices rose around two percent as traders tracked developments in Syria after president Bashar al-Assad fled the country over the weekend as Islamist-led rebels swept into Damascus.
Investors also reacted to developments in China where President Xi Jinping and other top leaders said Monday they would adopt a more “relaxed” approach to monetary policy as they hashed out plans to boost the economy next year.
The world’s second-largest economy is battling sluggish domestic consumption, a persistent crisis in the property sector and soaring government debt — all of which threaten Beijing’s official growth target for this year.
Leaders are also eyeing the second term of Donald Trump in the White House, with the president-elect indicating he will reignite his hardball trade policies, fuelling fears of another standoff between the superpowers.
Elsewhere in Asia, South Korean stocks tumbled as the country was racked with political uncertainty after President Yoon Suk Yeol escaped impeachment following his brief imposition of martial law last week.
The won was trading at around 1,432 per dollar today, compared with 1,413 on Friday.
The euro rose against the dollar, having taken a hit last week when France’s new government fell after a no-confidence vote.
The Paris stock market rose today, with President Emmanuel Macron apparently eyeing a broad alliance to form a new French government, after Michel Barnier was ousted last week over his 2025 budget plan.
– Rates and inflation –
Investors also have their eyes on possible cuts to interest rates.
The European Central Bank is expected to lower borrowing costs this week and the US Federal Reserve holds its rate meeting next week.
But US consumer price inflation (CPI) and wholesale price inflation data are due to be released this week, which could influence its decision.
Daniela Sabin Hathorn, senior market analyst at Capital.com, noted that the market currently overwhelmingly expects the Fed to make a 0.25-percentage-point cut in interest rates, “but this could quickly change if the CPI data does not come in as expected.”
A higher CPI reading would diminish the chance of a rate cut, “likely moving the dollar and yields higher, whilst equities stumble slightly,” she said.
“If, however, the reading is smaller than expected, then the recent bullishness in US equities could be in for another leg higher, whilst the dollar may face some selling pressure as expectations for rate differentials weaken,” she added.
On Wall Street, the S&P 500 and Nasdaq composite slipped from record highs set last week.
Shares in Nvidia fell around three percent at the start of trading after China on Monday launched an investigation into the US chip giant for allegedly violating its anti-monopoly laws.
– Key figures around 1630 GMT –
New York – Dow: DOWN 0.1 percent at 44,582.94 points
New York – S&P 500: DOWN 0.4 percent at 6,066.81
New York – Nasdaq Composite: DOWN 0.5 percent at 19,770.81
Paris – CAC 40: UP 0.7 percent at 7,480.14 (close)
Frankfurt – DAX: DOWN 0.2 percent at 20,345.96 (close)
London – FTSE 100: UP 0.5 percent at 8,352.08 (close)
Seoul – Kospi: DOWN 2.8 percent at 2,360.58 (close)
Tokyo – Nikkei 225: UP 0.2 percent at 39,160.50 (close)
Hong Kong – Hang Seng Index: UP 2.8 percent at 20,414.09 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,402.53 (close)
Euro/dollar: UP at $1.0583 from $1.0566 on Friday
Pound/dollar: UP at $1.2791 from $1.2740
Dollar/yen: UP at 151.03. yen from 149.97 yen
Euro/pound: DOWN at 82.76 from 82.93 pence
Brent North Sea Crude: UP 1.7 percent at $72.36 per barrel
West Texas Intermediate: UP 2.1 percent at $68.59 per barrel
