Global Factors influencing ASX stocks on 20 October 2023

On 20 October 2023, at AEDT 12:35 PM, the benchmark index S&P/ASX 200 is trading lower today, declining 78.30 points or 1.12%, and is currently trading at 6,903.30 levels. Out of 11 sectors, 10 are trading lower along with the S&P/ASX 200. The Materials and Health Care sectors were the top 2 declining sectors, down by 1.78% and 1.23% in their index values.

Also read: Mid-Market: S&P/ASX 200 Trading Lower By 1.07%; LTR Shares Are Declining By 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 lower in their previous session. NASDAQ Composite, S&P 500, NASDAQ-100, and Dow jones ended lower by 0.96%, 0.85%, 0.85%, and 0.75% respectively.

2. On Thursday, the Dow ended lower as investors assessed a rise in the 10-year Treasury yield, varied quarterly results, and comments from Federal Reserve Chairman Jerome Powell. Powell stated that the Fed is proceeding cautiously regarding future rate hikes, considering the recent surge in Treasury yields that has significantly impacted financial conditions. He noted that sustained economic growth might necessitate further policy tightening.

3. Gold extended its three-day rally on Thursday as the dollar fell due to the absence of immediate rate hike support from Federal Reserve Chair Jerome Powell, despite ongoing inflation concerns. Additionally, the escalating risk of a larger Middle East conflict, with potential repercussions on the global economy, prompted investors to seek safe havens, further boosting the demand for gold.

4. In September, Japanese consumer inflation exceeded expectations, driven by elevated food prices, while the core inflation rate, closely monitored by the Bank of Japan, remained close to the highest levels seen in four decades. The national core consumer price index, excluding volatile fresh food prices, rose by 2.8% year-on-year, according to data released by the Statistics Bureau on Friday.

5. The Hang Seng and FTSE 100 is down by 2.46% and 1.17%.

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