The series of positive developments regarding global economies increased the risk appetite in global share markets.
According to the data announced yesterday, the Producer Price Index (PPI) in the USA exceeded expectations with an increase of 0.7 percent on a monthly basis and 1.6 percent on an annual basis in August. Producer inflation reached its highest monthly value since June 2022 in August.
Retail sales in the country also increased by 0.6 percent on a monthly basis in August, above expectations.
Analysts said that the retail sales data announced in the USA points to the strong stance of the country’s economy.
Analysts stated that data in the country indicate that consumer demand is moderate and not high enough to trigger inflation concerns, and emphasized that this situation supports “soft landing” scenarios.
Analysts stated that although the CPI and PPI in the USA increased above expectations, it was not enough to change the expectations that the US Federal Reserve (Fed) would keep the interest rate constant at its meeting on September 20.
According to pricing in money markets, the probability that the Fed will keep the policy rate constant at 5.25-5.50 percent at its September meeting has increased to 97 percent.
On the energy side, the barrel price of Brent oil, which has increased by 0.4 percent to 94 dollars as supply concerns remain hot, has continued its rise for the 6th consecutive trading day.
On the other hand, the intense demand on the first trading day of chip manufacturer Arm Holdings, of which SoftBank Group is the main partner, known as the largest public offering of this year, spread to other technology stocks.
Shares of Arm Holding, which SoftBank bought for approximately 32 billion dollars in 2016, started to be traded on Nasdaq after its public offering with a valuation of 54.5 billion dollars and gained nearly 25 percent in value on the first trading day.
Analysts stated that Arm Holdings, the largest IPO of this year, is expected to stimulate the IPO market.
In addition, the news flow that workers in the automobile industry in the USA will decide to strike put pressure on the share prices of automobile companies such as Ford, General Motor and Stellantis.
Following these developments, the Dow Jones index in the New York Stock Exchange increased by 0.96 percent, the S&P 500 index increased by 0.85 percent and the Nasdaq index increased by 0.81 percent. Index futures contracts in the USA also started the new day on a positive note.
Europe
Despite the ECB’s 25 base increase in interest rates, a positive trend was observed in European stock markets with Lagarde’s “dovish” guidance.
In the statement made yesterday by the ECB, it was stated that the bank decided to increase the 3 main policy rates by 25 basis points, and the refinancing rate was increased to 4.50 percent, the deposit rate to 4 percent and the marginal funding rate to 4.75 percent.
Making a statement after the decision, ECB President Lagarde said, “We have been in a very slow growth for 5 quarters, looking at our projections, we are now approaching the end.” he said.
Stating that some of the board members were in favor of keeping the interest rate constant at this meeting, Lagarde said that the majority supported this decision to increase.
Analysts stated that expectations that the ECB may be approaching the end of the interest rate hike cycle have increased, and that developments regarding inflation will be effective in the bank’s decisions.
Following these developments, the euro/dollar parity completed the day at 1.0643 with a decrease of 0.8 percent, after testing its lowest level since May 31. The parity is currently at 1.0650, 0.1 percent above its previous close.
Yesterday, the DAX 40 index in Germany gained 0.97 percent, the CAC 40 index in France gained 1.19 percent, the FTSE 100 index in England gained 1.95 percent and the FTSE MIB 30 index in Italy gained 1.37 percent. Index futures contracts in Europe started the new day on a positive note.
Asia
Asian markets followed a positive course with the impact of the Chinese government’s steps to support the economy and the positive data announced.
In addition to the rise in global equity markets moving to Asia, the People’s Bank of China (PBoC) reducing the required reserve ratios of banks and credit institutions by 25 basis points and the data announced today giving positive signals about economic activity supported the risk appetite.
In the statement made by the bank, it was noted that the decision “aims to strengthen the basis of economic recovery and provide sufficient cash to the market.”
PBoC, which reduced the required reserve ratio for the second time this year, first reduced the required reserve ratio by 25 basis points on March 17.
According to the data announced today in the country, industrial production exceeded expectations with an annual increase of 4.5 percent and retail sales of 4.6 percent in August, while the unemployment rate decreased again to 5.2 percent.
Analysts stated that the data coming above the forecasts signaled a recovery in China’s economic activity, and pointed out that this could be evidence that the previous incentive measures were starting to be effective.
Near the close, the Nikkei 225 index in Japan increased by 1.3 percent, the Kospi index in South Korea increased by 1.3 percent, the Hang Seng index in Hong Kong increased by 1.5 percent and the Shanghai composite index in China increased by 0.2 percent.
Domestic markets
Domestically, Borsa Istanbul’s BIST 100 index, which followed a fluctuating course yesterday, completed the day at 8,118.75 points with a 1.31 percent gain in value.
Yesterday, with the rise in global equity markets carried over to Borsa Istanbul, the BIST 100 index started to rise after falling to its lowest level of 7,797.06 points during the day, increasing by more than 4 percent compared to this level.
After following a horizontal course yesterday and closing the day at 26.9456, Dollar/TL is traded at 26.9460 at the opening of the interbank market today.
Analysts stated that today, the Central Bank of the Republic of Turkey (CBRT)’s market participants survey and housing sales will be followed domestically, and abroad, the foreign trade deficit in the Eurozone and industrial production data in the USA will be followed, and from a technical perspective, the intense data agenda will be followed. He noted that in the BIST 100 index, 8,200 and 8,300 levels are resistance, while 8,100 and 8,000 points are support.
