Stocks Slip Before Inflation Report, As Bitcoin Hits Fresh Record

Faizan Hashmi Published March 12, 2024 | 05:46 PM

Global stock markets were mostly lower Monday, as traders prepared for fresh consumer inflation data that could provide new clarity on the US Federal Reserve's battle against rising prices

New York, (UrduPoint / Pakistan Point News - 12th Mar, 2024) Global stock markets were mostly lower Monday, as traders prepared for fresh consumer inflation data that could provide new clarity on the US Federal Reserve's battle against rising prices.

Equities on both sides of the Atlantic have risen sharply since the start of the year amid a boom in enthusiasm for stocks linked to artificial intelligence, but the rally stalled last week as investors consolidated their recent gains.

The Fed has held its key lending rate at a 23-year high for months now as it looks to return inflation firmly to its long-run goal of two percent.

Tuesday's data will be closely watched for signs of whether January's monthly uptick in inflation was a one-off or if it proves to be more sustained.

The Dow Jones Industrial Average was the only major Wall Street index to gain, rising 0.1 percent. Both the broad-based S&P 500 and the tech-rich Nasdaq fell.

"The market's a little anxious ahead of the February report, because it wants to be able to see that basically, the January surprise was not repeatable," Patrick O'Hare from Briefing.com told AFP.

Traders are now factoring in three US rate cuts this year, compared with six that were penciled in just three months ago.

"Much depends on any change in sentiment we may see after we get the latest US inflation updates tomorrow and Thursday," said David Morrison, senior market analyst at FCA.

Bitcoin struck a fresh peak of more than $72,700 Monday as the world's most popular cryptocurrency won further support on greater trading accessibility, while gold prices also rose.

"Years of persistent inflation and the depreciation of fiat currencies have heightened interest in gold and bitcoin, viewed by many as the ultimate store of value and a reliable hedge against inflation," said Fawad Razaqzada, analyst at FOREX.com.

Bitcoin, sometimes referred to as BTC, has also been boosted by moves by US authorities and now regulators in Britain to allow exchange-traded funds (ETFs) for the popular cryptocurrency, opening it up to new classes of investors.

"The launch of BTC Spot ETFs has transformed the market structure, providing institutions with convenient, secure, and regulated entry points into the digital assets market," said Matteo Greco, analyst at Fineqia International.

"Major financial institutions are now actively involved in holding and trading BTC."

- Japan tech sell-off -

Most major European markets also finished lower Monday, although London's FTSE 100 eked out a small gain of 0.1 percent.

On the corporate front, shares in Telecom Italia slumped nearly 10 percent following heavy losses last week on a badly received strategy update centered on reducing debt. The firm's shares closed down 4.6 percent, while the overall Milan market slipped by 0.3 percent.

In Asia, Japanese equities were weighed down by a tech sell-off after Friday's losses in New York, while exporters took a hit from a stronger yen as the Bank of Japan considers tightening monetary policy, in contrast to rivals gearing up for rate cuts.

Hong Kong and Shanghai rose, however, following figures showing a bigger-than-forecast jump in Chinese consumer prices last month.

- Key figures around 2130 GMT -

New York - Dow: UP 0.1 percent at 38,769.66 points (close)

New York - S&P 500: DOWN 0.1 percent at 5,117.94 (close)

New York - Nasdaq Composite: DOWN 0.4 percent at 16,019.27 (close)

London - FTSE 100: UP 0.1 percent at 7,669.23 (close)

Paris - CAC 40: DOWN 0.1 percent at 8,019.73 (close)

Frankfurt - DAX: DOWN 0.4 percent at 17,746.27 (close)

EURO STOXX 50: DOWN 0.6 percent at 4,930.42 (close)

Tokyo - Nikkei 225: DOWN 2.2 percent at 38,820.49 (close)

Hong Kong - Hang Seng Index: UP 1.4 percent at 16,587.57 (close)

Shanghai - Composite: UP 0.7 percent at 3,068.46 (close)