Futures rise, stocks extend rally as dollar plunges

Published by
Nonhlanhla P Dube

Gold was trading at R29K an ounce, down 0.2 %.
Stocks extended their rally on Wednesday, as the dollar fell and investors speculated that the worst of this year’s equities meltdown was behind.

Following the S&P 500’s greatest gain since June, technology shares propelled a 1.5 % rise in an index of Asian equities. European futures rose, and US contracts rose as well, boosted by a Netflix Inc. gain in extended trading on a smaller-than-expected subscriber drop.

Following a report that regulators are closing up an investigation into ride-hailing giant Didi Global Inc. with a huge fine, the tech rally swept along Chinese firms, fanning optimism of an end to Beijing’s crackdown on the sector.

A dollar index has fallen around 1% this week, indicating declining haven demand for the greenback and an improved mood in markets. Treasuries have declined, bringing the 10-year yield back above 3%.

The euro was trading around a two-week high against the dollar, owing to the potential of a larger-than-expected interest-rate hike by the European Central Bank on Thursday. Investors are encouraged by speculation that corporate earnings will hold up and that the Federal Reserve will avoid excessive monetary tightening. Concerns of a worldwide recession caused by increasing interest rates, Europe’s energy issues, and China’s Covid and property-sector woes are receding.

In a note, Kristina Hooper, chief global market strategist at Invesco, wrote, “Stocks have been beaten down.” “That doesn’t mean we won’t see more downside for some stock markets, especially given that earnings expectations are likely to be adjusted downward.” But, in my opinion, we are far closer to the bottom than the top.”

In Europe, Gazprom PJSC plans to restart gas exports through its Nord Stream pipeline to Europe on Thursday, albeit at a reduced capacity, as the region braces for shortages as a result of Russia’s conflict in Ukraine.

Crude oil fell to around R1700 per barrel elsewhere. Bitcoin was trading above R390K after breaking out of a one-month trading range.

Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at nonhlanhla@rateweb.co.za

Published by
Nonhlanhla P Dube