Global Factors influencing ASX stocks on 30 October 2023

On 30 October 2023, at AEDT 12:20 PM, the benchmark index S&P/ASX 200 is trading lower today, declining 46.40 points or 0.68%, and is currently trading at 6,780.50 levels. Out of 11 sectors, 10 are trading lower along with the S&P/ASX 200. The Energy and Health Care sectors were the top 2 declining sectors, down by 1.77% and 1.31% in their index values.

Also read: Mid-Market: S&P/ASX 200 Trading Lower By 0.70%; Extending To 12 Months Low

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, NASDAQ-100, ended higher by 0.38%, 0.50% while Dow jones, S&P 500 ended lower by 1.12%, 0.48% respectively.

2. Oil prices dropped by US$1 per barrel on Monday, with investors exercising caution prior to the Fed policy meeting and China's upcoming manufacturing data. This decline offset the support stemming from geopolitical tensions in the Middle East. Both Brent and WTI experienced a 3% increase on Friday following increased ground incursions by Israel into Gaza, raising concerns about a potential widening of the conflict in a region responsible for a significant portion of global oil production.

3. Asian shares fell on Monday amid concerns about a broader conflict following Israel's actions in Gaza. Investors were cautious ahead of central bank meetings in the United States, Britain, and Japan. There were fears of policy tightening, especially in Japan. This geopolitical tension influenced the market sentiment, leading to a decline in Asian shares as investors adopted a more cautious approach.

4. The global economy is set to grapple with persistent high inflation next year, according to a Reuters survey of over 200 economists. The majority of respondents expressed concern that inflation might exceed their initial forecasts, implying that elevated interest rates will endure. Initially projected for mid-2024, interest rate reductions by central banks are now anticipated in the latter part of the year, signalling a shift from earlier predictions. This adjustment highlights the ongoing challenge of managing inflationary pressures in the coming economic landscape.

5. The Hang Seng is up by 2.08% and FTSE 100 is down by 0.86%.

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