Global Factors influencing ASX stocks on 11 October 2023

On 11 October 2023, at AEDT 12:30 PM, the benchmark index S&P/ASX 200 is trading higher today, gaining 33.10 points or 0.47%, and is currently trading at 7,073.70 levels. Out of 11 sectors, 10 are trading higher along with the S&P/ASX 200. The Materials and Information Technology sectors were the top 2 gaining sectors, up by 1.39% and 0.97% in their index values.

Also read: Mid-Market: S&P/ASX 200 Trading Higher By 0.34%; Buoyed By Materials And IT Sectors

On that note, let us look at a few global reasons impacting the stock market today:

1. Key U.S. indices ended higher in their previous session. NASDAQ Composite, S&P 500, NASDAQ-100, and Dow jones ended higher by 0.58%, 0.52%, 0.56%, and 0.40% respectively.

2. On Tuesday, the Dow ended higher due to recent Federal Reserve comments suggesting a potential pause in rate hikes next month, which helped limit Treasury yields. Atlanta Federal Reserve President Raphael Bostic reinforced the anticipation of a stable rate stance, stating that many of the 11 rate hikes implemented since March 2022 have yet to impact the economy significantly.

3. In early Asian trade on Wednesday, oil prices remained relatively stable as concerns diminished regarding potential supply disruptions amid the conflict between Israel and the Palestinian Islamist group Hamas. Although Brent and WTI prices had surged by over US$3.50 on Monday due to fears of the conflict expanding beyond Gaza, they settled lower in Tuesday's session.

Despite Israel having minimal crude oil production, market concerns heightened over the possibility of the conflict escalating and impacting Middle East supply, potentially exacerbating the anticipated deficit for the remainder of the year.

U.S. officials have implicated Iran in the Hamas attack on Israel, but substantial evidence of the Islamic Republic's involvement has yet to surface.

4. On Tuesday, Wall Street indexes concluded with gains for the third consecutive day, driven by dovish statements from U.S. Federal Reserve officials. These remarks led to a decrease in Treasury yields as investors carefully observed developments in the Middle East.

After prominent Fed officials' comments on Monday, Atlanta Fed President Raphael Bostic stated that the U.S. central bank does not require additional interest rate hikes and expressed his belief that there is no recession on the horizon.

5. The Hang Seng and FTSE 100 is up by 0.84% and 1.82%.

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