The storm had already claimed the lives of at least two people in China's Hainan and 16 people in the Philippines
asia11 hours ago
Global stock markets and gold prices rallied on Thursday with the S&P 500 hitting a new intraday record soon after the Federal Reserve signalled lower rates after maintaining current rate unchanged.
Hope for an impending trade truce between the US and China was also critical in boosting investor optimism across the globe.
Most major Gulf markets rallied for the third straight session as oil prices rose. The Abu Dhabi index closed 1.4 per cent higher. In Dubai, the index rose 0.7 per cent. However, Saudi index dropped 0.7 per cent.
US Fed Chairman Jerome Powell said the bank would hold interest rates steady for now, but he dropped strong hints that further easing would be necessary if global trade tensions continue to dampen economic growth. Many economists expect the Fed to propose a 25-basis point cut at its July meeting.
Analysts said the Fed, like the markets, is watching the upcoming G20 meeting at the end of the month, where US President Donald Trump is expected to meet China President Xi Jinping to see if there is a chance to resolve the trade war.
US Trade Representative Robert Lighthizer told a congressional hearing that he plans to speak with China's top trade envoy, Vice Premier Liu He, soon and also to meet with him in Osaka.
Christophe Barraud, chief economist at Market Securities in Paris, said stock markets had so far mostly dodged fallout from the trade war. He warned they could suffer if economic indicators worsen in the second half of the year.
"Equities are mainly benefiting from the easy money policy, without too much damage on the economic front," he said.
The Abu Dhabi index closed 1.4 per cebt higher with Emirates Telecommunications adding 2.8 per cent and First Abu Dhabi Bank (FAB) was up 1.2 per cent. In Dubai, the index rose 0.7 per cent, mainly lifted by Emaar Properties which closed 3.2 per cent higher.
The Saudi index, which fell the day before, dropped another 0.7 per cent, with most of its banking shares sliding.
Gold prices surged to their highest in more than six years on Fed's possible rate cut signals as early as next month, pressuring US Treasury yields and the dollar. The dollar dropped broadly against major currencies and those from emerging markets, and was at its weakest level against the Japanese yen this year, with one dollar buying 107 yen.
Spot gold jumped 2.2 per cent to $1,390.38 per ounce by 11732GMT. Prices touched $1,392.84, their highest since early September 2013. "The driver for the surge is obviously the Fed delivering the dovish tilt that the market was looking for. It removed the 'patience' approach to cutting rates," said Saxo Bank commodity strategist Ole Hansen said. Elsewhere, Germany's DAX added 0.8 per cent to 12,410 while the CAC 40 in France gained 0.5 per cent to 5,548. Britain's FTSE 100 also picked up 0.5 per cent to 7,441.
The broad-based S&P 500 rose a few points above its all-time closing price in April to 2,953.91 about 15 minutes into trading, a gain of 0.9 per cent compared to Wednesday's close. The Dow Jones Industrial Average also climbed 0.9 per cent to 26,741.05, while the tech-rich Nasdaq Composite Index jumped 1.1 per cent to 8,076.93.
In Asia, Tokyo's Nikkei 225 index added 0.6 per cent to 21,462.86 while the Hang Seng in Hong Kong surged 1.2 per cent to 28,550.23. Shanghai was up 2.4 per cent to 2,987.12 while Australia's S&P ASX 200 picked up 0.6 per cent to 6,687.40. India's Sensex advanced 0.8 per cent to 39,431.89.
- issacjohn@khaleejtimes.com
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