US stocks gain on trade hopes but dollar tumbles
TRUMP’S FED CRITICISM SEES GREENBACK HIT 8-WEEK LOW AGAINST YEN
The benchmark S&P 500 edged closer to a record high yesterday, matching its longestever bull-market run, as US stocks rose after some encouraging earnings reports and on hopes that the United States and China could resolve their tariff dispute.
At its session high, the S&P 500 was 0.14 per cent shy of its January 26 all-time high. The index’s bull run will turn 3,453 days old today, which, for some market watchers, will be the longest such streak in history.
The United States and China are slated to hold trade talks this week, but President Donald Trump told Reuters he does not expect much progress. Still, the trade-sensitive S&P industrial sector gained 0.65 per cent.
Meanwhile, the dollar weakened to an eight-week low against the Japanese yen yesterday after US President Donald Trump criticised the chairman of the Federal Reserve for raising interest rates.
Trump also said he was “not thrilled” with the Federal Reserve for raising rates and that the central bank should do more to help him boost the economy That pushed the dollar lower and propped up prices of metals and crude oil. As the greenback weakened, investors turned to other traditional flight-to-quality investments, the Japanese yen and the Swiss franc.
The dollar fell to 109.76 Japanese yen, its lowest since June 27. Against the Swiss franc, the dollar weakened to its lowest since July 9, last at 0.987.
Dollar index falls
The dollar index, a measure of the greenback’s strength against a basket of six other currencies, fell 0.22 per cent to 95.535 after touching 95.440, its lowest since August 9.
“It would appear that Mr Trump would like to keep the US dollar a little on the weak side in order to remain competitive,” said CMC Markets chief markets analyst David Madden. That task may prove difficult. “Pushing the dollar down for long could be a tough task with safer bets in vogue on worries about trade wars and Turkey’s economic crisis,” said analysts at Western Union Business Solutions. Against the US currency, the euro strengthened 0.4 per cent to a daily high of $1.154.
The energy sector rose 1.07 per cent, the most among the 11 major S&P sectors.
“Investors, overall seem more optimistic that the troubles with global trade may get resolved this week,” said Kate Warne, principal and investment strategist at Edward Jones in Des Peres, Missouri.
Market benchmarks Sensex and Nifty extended their rise for the third straight session yesterday, though gains were marginal, and closed at fresh closing highs on buying in pharma and IT stocks amid optimism over US-China trade talks.
The BSE Sensex edged higher by 7 points and managed to end at a new peak of 38,285.75, surpassing its previous record closing of 38,278.75 hit on Monday.
The 30-share index also went on to hit its lifetime high (intra-day) at 38,402.96 in day’s trade. Its previous intra-day high was 38,340.69, reached Monday. During the day, it touched a low of 38,213.87.
The broader NSE Nifty also logged its fresh closing high of 11,570.90, up 19.15 points, or 0.17 per cent. The 50-issue index surpassed its previous record closing of 11,551.75, marked Monday. The Nifty also met its intraday record high at 11,581.75, breaking its previous day’s record of 11,565.30. The index slipped to a low of 11,539.60 during the day’s trade.
Unabated buying by domestic institutional investors (DIIs) and positive sentiment in world markets helped domestic markets scale fresh highs, brokers said.