Global Factors influencing ASX stocks on 18 October 2023

On 18 October 2023, at AEDT 12:30 PM, the benchmark index S&P/ASX 200 is trading up today, gaining 7.80 points or 0.11%, and is currently trading at 7,063.90 levels. Out of 11 sectors, 6 are trading lower despite the gain in the S&P/ASX 200. The Health Care and Energy sectors were the top 2 gaining sectors, up by 0.81% and 0.65% in their index values.

Also read: Mid-Market: S&P/ASX 200 Trading Lower By 0.15%; Credit Corp Plunges More Than 30%

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 mixed in their previous session. NASDAQ Composite, S&P 500, NASDAQ-100, ended lower by 0.25%, 0.01%, 0.33%, while Dow jones ended higher by 0.04% respectively.

2. On Tuesday, the Dow saw marginal gains, hindered by rising Treasury yields due to robust retail sales data. The strong sales figures highlighted the economy's sustained vigor, fuelling concerns about a potential Federal Reserve rate hike before year-end. The upward surge in Treasury yields, especially the 2-year yield reaching a 17-year high, indicated the Fed's ongoing challenges in managing the robust economy.

3. Gold prices stabilized after initial declines on Tuesday, as markets adopted a cautious stance ahead of upcoming cues related to the U.S. economy and speeches from Federal Reserve officials. The precious metal had experienced significant gains during the Israel-Hamas conflict due to safe-haven demand. However, this trend reversed after a stronger-than-expected U.S. inflation report raised concerns about potential interest rate hikes. The absence of immediate escalation in the conflict reduced near-term safe haven demand, and the U.S. dollar strengthened, reaching near 11-month highs, further impacting gold prices.

4. Country Garden Holdings, China's largest private property developer, is on the brink of defaulting on its US$11 billion overseas debt, failing to make a coupon payment due on Wednesday to bond investors. This potential default adds to a growing list of Chinese developers facing similar situations, intensifying the crisis in the property sector. This sector constitutes approximately a quarter of the world's second-largest economy, raising concerns about the broader economic impact of these defaults.

5. The Hang Seng is flat and FTSE 100 is up by 0.58%.

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