Global Factors influencing ASX stocks on 13 December 2023

On 13 December 2023, at AEDT 11:22 AM, the benchmark index S&P/ASX 200 is trading higher today, gaining 18.90 points or 0.26%, and is currently trading at 7,254.20 levels. Out of 11 sectors, 7 are trading higher along with the S&P/ASX 200. The Health Care and Information Technology sectors were the top 2 gaining sectors, up by 0.70% and 0.56% in their index values.

Also read: Mid-Market: S&P/ASX 200 Trading Higher By 0.20%; Lifted by Information Technology

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

1. Some of the key U.S. indices ended higher in their previous session. NASDAQ Composite, NASDAQ-100, Dow jones, and S&P 500 ended higher by 0.70%, 0.82%, 0.48%, and 0.46% respectively.

2. On Tuesday, the Dow closed higher, with technology stocks leading the way, fueled by expectations of a potential early rate cut in the coming year due to a persistent slowdown in inflation. The Federal Reserve was preparing for its monetary policy decision scheduled for Wednesday. Annual headline consumer price growth slightly decreased to 3.1% last month from October's 3.2%, as reported by the Bureau of Labor Statistics. The month-on-month reading saw a marginal increase of 0.1%, contrary to economists' predictions of 3.1% and 0.0%, respectively. The data adds to the narrative influencing market sentiment and the anticipation of the Federal Reserve's actions.

3. The API reported a larger-than-expected decline in U.S. crude inventories by 2.3 million barrels for the week ending Dec. 8, easing concerns about excess global crude supplies amid worries about increasing non-OPEC production. WTI futures, the U.S. benchmark, traded at US$68.83 after a 3.8% drop, heading for its longest weekly losing streak since 2018.

4. Australia's government anticipates a significantly improved budget outlook, with revenues surpassing forecasts, according to Treasurer Jim Chalmers in the mid-year economic and fiscal outlook (MYEFO). The projected budget deficit for the year ending June 2024 is AU$1.1 billion, a substantial decrease from the AU$13.9 billion forecasted in May. Despite the improved financial picture, the government is cautious about additional cost-of-living handouts to prevent exacerbating inflationary pressures. The Labor government achieved the first budget surplus in 15 years in 2022/23, attributed to robust profits in the mining sector and unexpectedly strong employment figures.

5. The Hang Seng is up by 1.07% and FTSE 100 is down by 0.03%.

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