Murat Aslan
August 02, 2024•Update: August 03, 2024
ISTANBUL
Global markets followed a negative course amid concerns that economic activity in the US may slow down more sharply than expected and news that the Bank of Japan (BoJ) may raise interest rates further, while the data in the US employment report focused investors' attention on Friday.
The Institute for Supply Management’s (ISM) manufacturing Purchasing Managers’ Index (PMI) fell to an 8-month low of 46.8 in July, below market expectations, according to data released in the country.
The number of first-time jobless claims in the US also exceeded market expectations with 249 thousand, the highest level in nearly a year.
Unit labor cost, one of the inflation indicators followed by the Fed, increased by 0.9 % in the second quarter, below expectations.
Closely watched non-farm payroll is expected to increase by 175 thousand people in July, and the release of this data may increase market volatility, analysts stated.
The US Federal Reserve (Fed) gave the green light to interest rate cuts starting in September, although the data released on Thursday caused recession concerns to influence asset prices.
Recent developments significantly affected the pricing in the money markets and raised questions about the size of the Fed's moves, while the probability of a 50 basis points rate cut at the September meeting instead of a total of 75 basis points until the end of the year is seen as 30%.
On the other hand, the balance sheet season continues to cause stock and sectoral volatility to remain high.
US tech giants Apple and Amazon's revenues increased in the April-June period, while Intel's revenues decreased.
US markets saw a slight downward on Thursday, with the Nasdaq index fell 2.3%, the S&P 500 dropped 1.37%, and the Dow Jones decreased by 1.21%.
The dollar index stands between 104.0-104.5 while Brent crude oil prices have stood at $79,9 per barrel. The US 10-year bond yield closed at 3.95%, and gold prices up by 0.5% to $2,458 an ounce.
European stock markets continued to follow a mixed trend.
The FTSE 100 index in the UK dropped 1.01%, France's CAC 40 index 2.14%, Germany's DAX 40 index decreased 2.3% and, Italy's MIB 30 index 2.68% on Thursday.
In Türkiye, the BIST 100 index in Borsa Istanbul closed at 10,798.09 points, up 1.5% from the previous close. The USD/TRY exchange rate traded at 33.1770 at the opening of the interbank market on Friday.
Asian equity markets witnessed a deepening of selling pressure, while the decline in Japanese equity markets exceeded 5%.
The Bank of Japan (BoJ) stated that the Bank might continue to raise interest rates as part of the fight against inflation, while rumors that the BoJ could increase interest rate steps to 25 basis points in the markets increased the risk perception.
While technology companies seem to be leading the downward trend, the dollar/yen parity continues to remain at its lowest level in the last 5 months.
Both the yen, which strengthened with the hawkishness of the BoJ and the concern that the increasing recession concern in the world could negatively affect the performance of exporting Japanese companies played an important role in deepening the selling pressure in Japanese stock markets, analysts reported.
Near the close, Japan's Nikkei 225 index fell 5.1%, South Korea's Kospi index 3.9%, Hong Kong's Hang Seng composite index 2.3% and China's Shanghai index 0.5%.
*Writing by Sahika Malkoc
