Global Factors influencing ASX stocks on 14 December 2023

On 14 December 2023, at AEDT 11:30 AM, the benchmark index S&P/ASX 200 is trading higher today, gaining 103.00 points or 1.42%, and is currently trading at 7,360.80 levels. All 11 sectors are trading higher along with the S&P/ASX 200. The A-REIT and Information Technology sectors were the top 2 gaining sectors, up by 3.12% and 3.09% in their index values.

Also read: Mid-Market: S&P/ASX 200 Trading Higher By 0.39%; 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 1.38%, 1.27%, 1.40%, and 1.37% respectively.

2. The Dow achieved a record high following the Fed's unchanged rates. The Federal Reserve, foreseeing deeper rate cuts in 2024, emphasized a faster-than-expected cooling of inflation. Fed members projected the benchmark rate to reach 4.6%, indicating potential three rate cuts in 2024, contrasting with the earlier projection of 5.1% or two rate cuts. The tech sector surged as Treasury yields declined amid the Fed's dovish stance, contributing to the overall positive market sentiment.

3. The dollar faced downward pressure on Thursday as the Federal Reserve's recent economic projections signaled the conclusion of the interest-rate hike cycle, anticipating lower borrowing costs in 2024. This led to a surge in both the euro and Japanese yen. The European Central Bank (ECB) was set to announce its policy decision later in the day, while the Bank of Japan is on the agenda for the upcoming week. The shift in the Fed's stance contributed to the currency market dynamics, impacting major currencies as central banks globally responded to evolving economic conditions.

4. The UK's property market exhibited signs of recovery in November, benefiting from a decrease in mortgage rates. The Royal Institution of Chartered Surveyors (RICS) reported an improvement in its measure of new buyer enquiries, reaching a net balance of -14 compared to an upwardly revised -25 in October. Although still negative, November's reading marked the least weak performance since +1 in April the previous year. The easing of mortgage rates appears to have positively impacted buyer interest. Despite this improvement, surveyors remain cautious about the outlook for the coming year, reflecting ongoing uncertainties and challenges in the property market.

5. The Hang Seng is down by 0.89% and FTSE 100 is up by 0.08%.

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