Global shares
were trading mixed on Monday, as
investors
awaited further indications the Federal Reserve might begin cutting interest rates. France’s CAC 40 was virtually unchanged in early trading at 8,151.94, while Germany’s DAX edged up 0.1 per cent to 18,227.53. Britain’s FTSE 100 was little changed, inching down less than 0.1 per cent to 7,929.84.
The futures for the S&P 500 and the Dow Jones Industrial Average were 0.1 per cent lower.
Japan’s Nikkei 225 shed 1.2 per cent to finish at 40,414.12, as investors sold shares to lock in profits after the benchmark recently hit record highs.
Hong Kong‘s Hang Seng declined 0.2 per cent to 16,473.64, while the Shanghai Composite fell 0.7 per cent to 3,026.31.
China’s currency, the yuan, was set at a rate of 7.0996 against the US dollar. The official “central parity rate,” is based on a weighted average of prices offered by market makers before the interbank market opens each business day. It is allowed to rise or fall only by 2 per cent each trading day.
The yuan had weakened to more than 7.2282 to the dollar on Friday, falling to a four-month low, as the dollar gained against other currencies. Australia’s S&P/ASX 200 rose 0.5 per cent to 7,811.90. South Korea’s Kospi lost 0.4 per cent to 2,737.57.
A top Japanese finance official expressed reservations about the recent surge in the US dollar against the Japanese yen, fuelling speculation about possible intervention in the market. The dollar has risen to nearly 152 yen, a jump from slightly above 130 yen a year ago. It was trading at 151.32 yen on Monday, down from 151.41 yen. The euro cost USD 1.0823, up from USD 1.0810.
The Bank of Japan raised a key interest rate for the first time in 17 years last week, to barely above zero from below zero, or negative interest rates. That means borrowing rates in Japan still remain below those of the US and many other nations.
“The recent Bank of Japan meeting added another layer of complexity to the dollar’s trajectory. Despite the BOJ’s decision to hike rates, cautious communication failed to stimulate demand for the Japanese yen,” said Luca Santos, currency analyst ACY Securities.
On Friday, the S&P 500 slipped 0.1 per cent from an all-time high, while the Dow Jones Industrial Average fell 0.8 per cent. The Nasdaq composite rose 0.2 per cent, setting another record.
The US Federal Reserve has indicated it may deliver three cuts to interest rates this year, as long as inflation keeps cooling. The Fed’s main interest rate is at its highest level since 2001.
In energy trading, benchmark US crude added 45 cents to USD 81.08 a barrel. Brent crude, the international standard, rose 48 cents to USD 85.91 a barrel.