European and U.S. stock markets rose on Thursday as the European Central Bank cut interest rates and concerns that the tech sector was struggling eased after earnings from major chipmaker TSMC.
All major eurozone exchanges closed higher, with London joining them, after the ECB cut its key interest rate by a quarter of a percentage point and expressed confidence that inflation was under control.
“Overall, the ECB's decision is good news for investors,” said Jochen Stanzl, chief analyst at CMC Markets. “Investors now feel they are in a largely positive environment with the ECB supporting rather than hindering the bullish mood.”
Meanwhile, all major Wall Street indexes rose in midday trading. The tech-heavy Nasdaq led the way after Taiwan Semiconductor Manufacturing Co., which controls more than half of the world's chip production, reported better-than-expected third-quarter profits.
Earlier this week, Dutch semiconductor equipment maker ASML issued disappointing outlooks, raising concerns among some investors that the recent rally in tech stocks has gone too far and is causing sharp selloffs on both sides of the Atlantic. There is.
“Semiconductor manufacturing giant TSMC's early results ease concerns about a potential slowdown in chip demand, as indicated by Tuesday's lackluster ASML data,” said Joshua Mahoney, chief market analyst at Scope Markets.
As of midday Thursday, semiconductor giant Nvidia was up nearly 3%, while rival AMD was up more than 1%.
Wall Street also received a boost from data showing U.S. retail sales accelerated in September and a decline in jobless claims, the latest sign of the health of the U.S. economy.
The ECB's decision to cut the benchmark interest rate by 25 basis points was well communicated and widely expected. But the central bank's press release emphasized that inflation is coming under control and that economic activity in the euro area is weak, suggesting further rate cuts are on the way.
“We think the data supports at least a 25 basis point cut in each of the next few meetings,” said Jack Allen Reynolds, deputy eurozone economist at Capital Economics.
Earlier on Thursday, euro zone inflation was revised downward from 1.8% to 1.7% in September, well below the ECB's 2% target. The economic downturn is also putting pressure on the ECB to cut borrowing costs.
The euro fell against the dollar, and gold hit a new all-time high, exceeding $2,700 per ounce.
Finnish telecommunications equipment maker Nokia announced an 8% drop in sales and its stock price fell nearly 3%.
Nestlé's stock price rose about 3% after new CEO Laurent Fréchet announced a shake-up of the Swiss food giant's management team following sluggish sales.
~China's real estate sector crisis~
Stock markets in Hong Kong and Shanghai fell earlier in the day as real estate stocks fell after traders were disappointed with new measures by China's housing minister to ease the real estate crisis.
China, the world's second-largest economy, has struggled to recover since lifting strict coronavirus restrictions at the end of 2022, hit by a debt crisis in its real estate sector and weak consumer demand.
Crude oil prices have gradually risen after falling in recent days.
– Main figures around 1540 GMT –
New York – Dow: up 0.3% to 43,219.16 points
New York – S&P 500: up 0.3% to 5,857.06
New York-Nasdaq Composite: up 0.4% to 18,443.52
Paris – CAC 40: up 1.2% to 7,583.73 (close price)
Frankfurt – DAX: up 0.8% to 19,583.39 (close price)
London – FTSE 100: up 0.7 to 8,385.13 points (close price)
Tokyo – Nikkei 225: 0.7% lower at 38,911.19 (closing price)
Hong Kong Hang Seng Index: 1.0% lower at 20,079.10 (closing price)
Shanghai – Overall: down 1.1% to 3,169.38 (close price)
EUR/USD: down to $1.0826 from $1.0859 on Wednesday
GBP/USD: increased from $1.2986 to $1.2995
USD/JPY: Increased from 149.63 yen to 150.12 yen
EUR/GBP: down from 83.62p to 83.34p
West Texas Intermediate: up 0.6% to $70.81 per barrel
Brent crude: up 0.4% to $74.54 per barrel
gv/jj
