Market UpdatesJun 18, 20262 Min

Global market wrap: Asian equities trade positive as Fed hints at rate hikes this year; oil tumbles

Global Market Wrap

We are back with quick updates on global stocks, commodities and companies across the world.

Asian stocks mostly traded positive on Thursday after the US Federal Reserve’s decision to hold interest rates steady, even as policymakers expect a hike later this year amid inflation concerns.

The market sentiment was also positive after the US and Iran confirmed the establishment of a 60-day structural framework to completely halt conflict operations, fully reopen the Strait of Hormuz and negotiate over Iran’s nuclear enrichment programme.

Japan’s Nikkei 225 gained 1.6% to breach the 71,000-mark for the first time and trade at around 71,304. South Korea’s Kospi also traded 1.6% higher at 9,005.

China’s Shanghai Composite index slipped 0.3% to 4,094 as retail sales unexpectedly contracted in May, marking the first annual decline since December 2022. Hong Kong’s Hang Seng fell 1.9% to 23,831.

Singapore’s Straits Times rose marginally, up 0.3% to 5,191. However, Australia’s S&P/ASX 200 fell 0.3% to 8,934.

US stock futures traded higher on Thursday on possibilities of a rate hike this year. S&P 500 futures rose 0.6%, Nasdaq 100 futures gained 1.1%, while futures tied to the Dow inched up 0.4%.

In Wednesday’s session, the S&P 500 tumbled 1.2%, marking the worst performance for the broad index on the first “Fed day” under a new chair since 1994, according to a report. The Dow Jones Industrial Average and Nasdaq 100 both declined around 1% each.

Oil prices continued their correction as concerns over an extended military blockade between the US and Iran eased after the release of the peace framework. Also, the International Energy Agency (IEA) said that it expects a supply glut next year. This comes after a lasting resolution to the US-Iran conflict, which could result in significantly higher supply volumes.

The US crude oil futures for July delivery fell 2.6% to $74.69 per barrel. Brent futures, the international benchmark, for August delivery were down 2.3% to $77.69 per barrel.

Meanwhile, gold prices resumed their rally as a drop in oil prices dampened inflation expectations. Spot gold traded 1.5% higher at $4,322 per ounce, though U.S. gold futures for ​August delivery were trading about 1% lower at $4,343 per ounce.

Here's a look at some major developments across global markets today:

Fed keeps rate steady at 3.5%-3.75%

The Federal Open Market Committee (FOMC) on Wednesday voted unanimously to keep its benchmark overnight borrowing rate anchored in a range of 3.5%-3.75%.

Fed officials removed their prior outlook for a rate cut this year and indicated that a rate hike was possible. However, the newly appointed Fed chairman Kevin Warsh didn’t participate in this prediction. Notably, Warsh has been a critic of the forecasting tool, i.e., the ‘dot plot’ grid, as well as other forward guidance out of the committee.

SpaceX adds a new board member

Within a week of its listing on the stock exchanges, SpaceX announced that it has appointed CEO Elon Musk’s longtime friend Roelof Botha as an independent director and a member of the company’s audit committee starting immediately.

Botha becomes the eighth board member at SpaceX, where Musk serves as chairman, in addition to his roles as CEO and technology chief.

Taxi-hailing app Go lists at 21% premium after biggest Japan IPO this year

Shares of taxi-hailing app provider Go zoomed 21% in their debut trade on the Tokyo Stock Exchange on Tuesday. Notably, Go has been Japan’s largest initial public offering (IPO) so far this year.

The company raised ¥88.6 billion ($553 million) in the offering for a market value of ¥186 billion last week. Investors expressed interest for more than 25 times the shares offered, according to a report.

Six companies seek up to $2.5 billion in Hong Kong offerings

Six companies launched Hong Kong public offerings on Wednesday, seeking to raise as much as ​a combined HK$19.8 billion ($2.5 billion).

These include Lingyi iTech, which ⁠supplies precision parts and hardware for AI devices. The company is seeking to raise up to HK$8.3 billion. Chinese chip ​design company SG Micro Corp, ⁠semiconductor equipment maker Circuit Fabology Microelectronics ​Equipment, Indonesian gold miner PT Merdeka Gold Resources, AI company Beijing ⁠Zhongke WengeAI ​Science and Technology and a smart parking systems provider Keytop Parking also seek to raise funds.

After Fed, Hong Kong holds base rate too

The Hong Kong Monetary Authority maintained the base rate at 4% after the US Federal Reserve announced it would keep interest rates unchanged on Wednesday.

Hong Kong has a ‘Linked Exchange Rate System’ that pegs the local dollar to the US dollar. Hence, the HKMA generally shadows the US monetary policy to maintain currency stability.

Elk Range Mining seeks up to $10 million in its Australia IPO

Elk Range Mining is seeking up to $10 million through its IPO on the ASX to progress its Idaho gold project in the US.

Central to the offering is the Friday gold mine and the nearby Orogrande processing plant, both located within Idaho’s historically productive Orogrande mining district. Funds raised will be deployed towards exploration, technical studies, permitting, and working capital activities.