World stock markets experienced a mixed day on Monday as traders prepared for Lunar New Year celebrations. While many Asian markets remained closed or operated on a half-day schedule, several European indices posted modest gains. In contrast, Japanese stocks fell following disappointing economic data.
In early European trading, Germany’s DAX increased by 0.2%, reaching 24,958.01. The UK’s FTSE climbed 0.3% to 10,479.47, and the CAC 40 in Paris also rose by 0.3%, closing at 8,333.81. Conversely, Tokyo’s Nikkei 225 index slipped 0.2% to 56,806.41 after the government announced that Japan’s economy grew at an annualized rate of only 0.2% in the last quarter of 2022, falling short of expectations.
This sluggish growth rate has increased speculation that Japanese Prime Minister Sanae Takaichi will continue to push for economic revitalization through increased government spending and tax cuts. Marcel Thieliant, head of Asia Pacific at Capital Economics, noted these potential fiscal measures in a recent report.
With many markets in Asia closing for the Lunar New Year, including China, South Korea, and Taiwan, trading volume was notably thin. In Hong Kong, the Hang Seng index gained 0.5% during its half-day session, closing at 26,705.94. Australia’s S&P/ASX 200 index also saw an uptick, rising 0.2% to 8,937.10, while India’s Sensex advanced by 0.4%.
Meanwhile, U.S. futures indicated a slight rise, with the future for the S&P 500 and the Dow Jones Industrial Average both up by 0.4%. U.S. markets will be closed on Presidents Day, a public holiday, which may influence trading patterns in the coming days.
Last Friday, U.S. stocks stabilized after a sharp decline, driven largely by concerns about how artificial intelligence could disrupt various industries, particularly impacting software companies. A report indicating a decline in inflation contributed to market steadiness, suggesting easing price pressures may allow for future interest rate cuts by the Federal Reserve. The S&P 500 edged up by less than 0.1% to 6,836.17, while the Dow Jones added 0.1% to 49,500.93. The Nasdaq composite dipped 0.2%, closing at 22,546.67.
Amid these fluctuations, technology stocks showed varying performance. The leading U.S. chipmaker, Nvidia, fell 2.2% on Friday. In contrast, software company AppLovin surged 6.4% after a significant drop the previous day, as attention shifted to the implications of AI in the tech sector.
On the commodities front, both gold and silver prices declined. Gold traded down by 0.3%, settling at $5,030.30 per ounce, while silver dropped 1.2% to $77.05 per ounce. Oil prices also experienced a downturn, with U.S. benchmark crude losing 34 cents to $62.55 per barrel, and Brent crude falling by the same margin to $67.41 per barrel.
The U.S. dollar strengthened slightly against the Japanese yen, reaching 153.33 yen, up from 152.64 yen. The euro traded at $1.1867, down from $1.1872.
As the Lunar New Year approaches, market participants will be observing economic indicators closely, particularly as global central banks navigate the complexities of inflation and growth.
