Global Factors influencing ASX stocks on 26 October 2023

On 26 October 2023, at AEDT 12:30 PM, the benchmark index S&P/ASX 200 is trading lower today, declining 56.80 points or 0.83%, and is currently trading at 6,797.50 levels. Out of 11 sectors, 9 are trading lower along with the S&P/ASX 200. The Information Technology and Telecommunication Services sectors were the top 2 declining sectors, down by 2.85% and 1.56% in their index values.

Also read: Mid-Market: S&P/ASX 200 Trading Lower By 0.58%; Dragged Down By IT Sector

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, NASDAQ-100, Dow jones, S&P 500 ended lower by 2.43%, 2.47%, 0.32%, 1.43% respectively.

2. On Wednesday, the Dow Jones Industrial Average faced a decline driven by rising Treasury yields and weak tech performance, notably Alphabet Inc Class A, which saw a more than 9% drop following disappointing quarterly results in its cloud business. Despite its cloud revenue rising 22.5% to AU$8.41 billion, missing Wall Street estimates, some analysts argued the selloff was excessive, given that the cloud business constitutes only about 11% of Alphabet's total revenue.

3. Economists at Westpac have revised their outlook, now anticipating a further increase in Australian interest rates in November. This shift follows unexpectedly high inflation figures. Westpac's Chief Economist, Luci Ellis, stated that the Reserve Bank of Australia (RBA) is likely to raise its cash rate by a quarter point to 4.35% during its upcoming meeting on November 7, altering her previous prediction of a stable rate.

4. China has intensified efforts to replace Western-made technology with domestic alternatives amidst heightened restrictions on high-tech exports imposed by Washington. This information, reported by Reuters, unveils government tenders, research documents, and insights from individuals familiar with the matter. These sources indicate a significant increase in domestic substitution initiatives since the previous year, reflecting China's drive to reduce reliance on foreign technology.

5. The Hang Seng and FTSE 100 is up by 0.55% and 0.33%.

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