European stocks rallied after the Bank of England cuts it benchmark interest rate and as investors ponder the prospect of the Ukraine-Russia war coming to an end, while Wall Street was mixed ahead of Amazon’s earnings and US jobs figures.
The UK’s FTSE 100 rose 1.2% while Germany’s DAX 30 and France’s CAC 40 were both up 1.5% after the Bank of England cut its key rate a quarter-point to 4.5% - with two members pushing for an even steeper reduction – and amid reports that US President Donald Trump will present a plan next week to end Russia’s invasion of Ukraine.
The British rate cut weighed on the Sterling pound, with the kiwi dollar climbing to 45.62 British pence at 7am in Auckland from 45.39 pence at 5pm yesterday and 45.35 pence at the close of trading on Wednesday, before the Waitangi Day public holiday.
“Despite the mixed messages, initially the market put more weight on the more dovish vote, driving down rates and the British pound, but much of this reversed,” Bank of New Zealand senior markets strategist Jason Wong said in a note.
The kiwi traded at 56.75 US cents at 7am from 56.74 cents yesterday.
Across the pond, stocks were mixed on Wall Street with the Nasdaq up 0.3% in afternoon trading ahead of Amazon’s December quarter result, which wraps up the current round of Magnificent 7 earnings after Alphabet and Microsoft disappointed investors earlier this week. The Dow Jones Industrial Average slipped 0.2%.
Chocolate maker Hershey rallied after beating earnings expectations, although the confectioner warned on rising coca prices, echoing a similar complaint from food group Mondelez International. International milk prices have also been rising, with local dairy companies such as Fonterra Cooperative Group eyeing up a farmgate price of $10 per kilogram of milk solids this season.
Obesity drugmaker Eli Lilly gained after a stronger-than-expected quarterly profit soothed some earlier concerns about sales of its weight-loss drug Zepbound and diabetes drug Mounjaro. The GLP-1 drugs have been seen as potentially reducing demand for sleep apnoea devices made by Fisher & Paykel Healthcare and ResMed.
Smoking hot
Tobacco company Philip Morris International surged on strong sales growth for its Marlboro cigarettes and Zyn nicotine pouches, putting it on track to close at a record.
And industrial conglomerate Honeywell International sank after saying it plans to carve itself up into three separately listed companies, breaking up its aerospace and automation divisions and spinning out its advanced materials arm.
Gold prices eased from their record ahead of the US jobs reports, with gold futures down 0.7% at US$2,874 an ounce as at 7am in Auckland. Economists expect the US unemployment rate was unchanged at 4.1% in January, with 170,000 new jobs added.
Locally, Australian futures indicate the S&P/ASX 200 index will slip 0.2%. The benchmark index climbed 1.2% yesterday while New Zealand’s S&P/NZX 50 index was closed for the public holiday.
Contact Energy yesterday stood by its proposed merger with Manawa Energy after the Commerce Commission raised some competition concerns in a pre-decision statement of issues notice. The shares rose 2.7% in Australian trading while New Zealand was closed.
And Fletcher Building’s Australian business has attracted interest from private equity suitors, according to a BusinessDesk report, while the building materials firm’s new leadership works through a strategic review of the group.
Reporting by Paul McBeth. Image from Jack Finnigan on Unsplash.