Daily market review

United States

Risk appetite improved Thursday after President Biden unveiled his infrastructure investment plan, which markets expect to be followed by still more fiscal stimulus. The Dow Jones industrial average rose 0.5 percent, the S&P 500 rose 1.2 percent to top 4,000 for the first time, and the NASDAQ gained 1.8 percent.

Growth generally beat value on the first day of the new quarter, with internet and entertainment stocks rallying. Technology, communications services, consumer discretionary, and energy were among the strongest sectors, while utilities and consumer staples were softer. Energy stocks tracked oil prices higher after the latest OPEC+ oil output agreement. Marathon Oil led with a gain of 10.4 percent.

Among companies in the news, Micron, the chipmaker, rose 4.8 percent after reporting better-than-expected results and raising its guidance. Nvidia, the gaming chipmaker, was another leader, up 3.5 percent. Microsoft rose 2.8 percent on good investor demand at the start of a new quarter.

In US economic data, the ISM manufacturing index topped expectations at 64.7 in March, up from 60.8 in February for another remarkably strong showing. Separately, initial jobless claims increased 61,000 to 719,000 in the week ended March 27, above expectations centering on 680,000.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$1.09 to US$64.63 while spot gold rose US$22.11 to US$1,729.29. The US dollar eased vs. most major currencies. The US Treasury 30-year bond yield fell 7 basis points to 2.34 percent and the 10-year note yield declined 6 basis points to 1.68 percent.


Stocks firmed Thursday with support from the Biden administration's spending plans and positive European economic reports. The Stoxx 600 pan-European index gained 0.6 percent, the German Dax rose 0.7 percent, the French CAC rose 0.6 percent, and the UK FTSE 100 was up 0.4 percent.

Covid-19 news was mixed, with the UK starting to reopen while France, Germany, and Italy extended lockdowns. ECB speakers focused on downside risks stemming from the pandemic, and several European banks suffered more fallout from their role in the Archegos Capital's forced liquidation of share holdings.

Outperformers included technology, retail, financial services, real estate, industrials, media, construction, and travel & leisure. Lagging were oil & gas, health care, basic resources, personal & household goods, and banks.

In technology, chipmakers saw good gains after TSMC announced plans to build new capacity and after US bellwether Micron issued upbeat guidance.

Among companies in the news, Sodexo, the French hospitality company, gained 0.9 percent on an earnings beat. Delivery Hero rose 2.7 percent after a big investor raised its stake in the German food deliverer. On the downside, AstraZeneca, the UK pharma, fell 1.0 percent amid uncertainties over use of its Covid-19 vaccine.

In economic news, March was a good month for UK manufacturing, in line with the rest of Europe. The 57.9 flash sector PMI was revised up to 58.9, 4.8 points above its final February mark and its highest level in a decade. Separately, final PMI data confirmed an excellent month for Eurozone manufacturing in March. The 62.4 flash sector PMI was revised a tick firmer to a final 62.5, marking a new series high.

Asia Pacific

Focus on US infrastructure spending plans and a positive US showing for tech stocks Wednesday helped lift Asia/Pacific equities markets Thursday along with better-than-expected Japanese and Australian economic reports.

News of big new US spending plans and the tech rally lifted Chinese markets. The Shanghai composite rose 0.7 percent, the CSI300 gained 1.2 percent, and the Hong Kong Hang Seng index outperformed with a gain of 2.0 percent.

Overseas strength in tech shares helped Japanese shares rise with the Nikkei 225 index up 0.7 percent and the broader Topix 0.2 percent firmer. Value stocks lagged growth with iron and steel stocks down the most. Best performers were insurance and electric appliances.

Australian shares rose on upbeat local economic data and the Biden infrastructure plan, with the All Ordinaries index up 0.7 percent. A CoreLogic Australian home price report showed property prices surging. Among sectors, tech tracked strength in US markets, with rising commodity prices boosting miners. Insurers led financials. Lagging were health care and industrials.

Among companies in focus, Japan's Dai-ichi Life rallied 9.5 percent after announcing a share buyback. China's Evergrande New Energy Vehicles rose 6.4 percent after unveiling its latest vehicle production plans. Taiwan Semiconductor, up 4.9 percent, announced expansion plans, and Boral, the Australian construction materials maker, rose 6.7 percent after launching a share buyback.

Japan's Mizuho Financial, down 0.3 percent, said it was not yet seeing an impact on profits from the Archegos Capital affair. Nitori, the Japanese furniture retailer, fell 4.2 percent on an earnings miss.

In economic news, Japan's Tankan index for large manufacturers picked up from minus 10 in the fourth quarter to a better-than-expected plus 5 in the first quarter; medium-sized and small manufacturers and also showed improvement.

Separately, Markit's China manufacturing index unexpectedly slowed from 50.9 in February to 50.6 in March for the fourth consecutive fall and lowest level since April 2020.

Looking ahead*

On Friday in Asia/Pacific, the Korean CPI report is scheduled. In Europe, most centers are on holiday. In North America, the US will release the March employment.

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