Thursday 11 January 2024 5:14 am

Moving markets: Five things shaping the FTSE 100 today

It briefly reached as high as 8,014, higher than its highest closing price of 8,012.53.

Moving Markets Today: Global Stocks Surge, Japan’s Nikkei Breaks 35,000, Oil Prices Rise; SEC Approves First Spot Bitcoin ETFs; All Eyes on Inflation and Earnings

U.S. stocks closed higher, led by a surge in large-cap stocks. Asian markets, including Japan’s Nikkei, followed the upward trend. The SEC’s approval of the first spot bitcoin ETFs marked a milestone for crypto enthusiasts. Oil prices rose amid increased Middle East tensions. Focus now shifts to upcoming December consumer and producer inflation reports, potentially influencing central bank decisions. On Friday, major banks, including JPMorgan Chase and Bank of America, are expected to reveal lower fourth-quarter profits. Here are five key takeaways for your day.

SEC Greenlights First Spot Bitcoin ETFs, Bolstering Enthusiasm in Crypto Circles

The US Securities and Exchange Commission’s approval of the first spot bitcoin exchange-traded funds (ETFs) is seen as a pivotal moment likely to attract new investors. Established firms like BlackRock, Invesco, and Fidelity, along with digital-focused newcomers Grayscale and Ark, received permission for ETFs. Bitcoin, currently at $46,337 in Asian trading, had surged to a 21-month high of $47,897 earlier in the week in anticipation of the SEC approval, driven by expectations that contributed to a significant 156% gain in its value last year.

Federal Reserve’s Williams Signals Extended Hold on Interest Rates

A top Federal Reserve official has emphasized caution regarding the expectation of an immediate shift towards a more relaxed monetary policy in March. president of the Fed’s New York branch and a member of the rate-setting Federal Open Market Committee John Williams said that any slowdown in qualitative tightening is not on the horizon. “I expect that we will need to maintain a restrictive stance of policy for some time to fully achieve our goals,” he added.

The OECD recommended the Bank of Japan consider gradually raising short-term interest rates and increasing flexibility in its bond yield control policy, provided inflation stays near the 2% target alongside sustained wage growth. Meanwhile, South Korea’s central bank hinted at aligning with global trends by leaning towards monetary easing.

Middle East Tensions Surge

Yemen’s Houthi rebels launched a major attack on Red Sea shipping lanes, prompting the U.S. and Britain to suggest potential further actions. The UN Security Council responded with a resolution demanding an immediate halt to the strikes. Simultaneously, Israeli airstrikes intensified in southern and central Gaza.

In Asian trading, oil prices edged up as tensions in the Middle East rose, juxtaposed against a surprise build in U.S. crude stockpiles that had caused an 80-cent drop in oil benchmarks during the previous session. U.S. West Texas Intermediate crude futures gained 0.28%, reaching $71.57 per barrel, while benchmark Brent crude oil futures rose by 0.27% to $77.01 per barrel.

What’s Coming Up

Investors are closely watching the U.S. Consumer Price Index (CPI) report scheduled for Thursday, as it has become a focal point in the market. The upcoming earnings season is also drawing attention, particularly with major banking giants like JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo all slated to disclose their financial results on Friday.

Asian Markets Soar with Nikkei at 35,000; Gold Shines

The Dow Jones Industrial Average gained 0.45%, closing at 37,695.73. The S&P 500 rose by 0.57% to 4,783.45, and the Nasdaq Composite increased by 0.75% to 14,969.65. Microsoft, Meta Platforms, and Nvidia notably boosted the S&P 500. Japanese stocks reached multi-decade highs, with the Topix and Nikkei 225 gaining 1.6%. Hong Kong’s Hang Seng index rose by 0.4%, while China’s CSI 300 fell by 0.2%. South Korea’s Kospi advanced by 0.3% following the Bank of Korea’s decision to maintain interest rates at 3.5%. Major currencies, including the dollar, remained steady ahead of the U.S. inflation report. Gold prices rose by 0.3%, reaching $2,028.78 per ounce in the spot market, and U.S. gold futures also increased by 0.3% to $2,033.00. Bitcoin held steady above $46,000.