Stocks Post Small Moves Before French Vote, Powell: Markets Wrap

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Stocks Post Small Moves Before French Vote, Powell: Markets Wrap

stock :: 2024-12-04 :: source - bloomberg

By Winnie Hsu and John Viljoen

(Bloomberg) -- European stocks and US equity futures made modest gains as traders braced for political developments in France and awaited remarks from Federal Reserve Chair Jerome Powell.

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Retail and technology shares helped push Europe’s Stoxx 600 index up 0.2%. S&P 500 index contracts also edged higher after the benchmark eked out its 55th record high of the year on Tuesday.

In Asia, South Korea’s Kospi index slid more than 1% after President Yoon Suk Yeol plunged the nation into a political crisis by briefly imposing martial law. The won regained some ground after tumbling on the developments. A gauge of regional stocks dropped 0.4%

France remained in focus, before a no-confidence motion that far-right leader Marine Le Pen’s party and a left-wing coalition have vowed to support. The vote looks set to topple the government and throw the country into political turmoil. French bonds opened lower, the CAC 40 index gained 0.3% in Paris and the euro was steady.

Powell’s speech and US data on services and manufacturing will draw attention later as investors attempt to assess whether the Fed will ease in December. Fed Bank of San Francisco President Mary Daly said a rate cut this month isn’t certain, but remains on the table. The dollar was little changed, while Treasury yields ticked higher.

Asia saw cautious trading after the short-lived declaration of martial law in South Korea led to the opposition pushing for Yoon’s impeachment. The uncertainties hurt sentiment toward the region at a time when Donald Trump’s imminent return and China’s economic woes have already weighed on the market.

“The situation remains dynamic and evolving and markets could continue to experience volatility as the existing cabinet is likely to be reshuffled and a possible impeachment process could be evaluated,” said David Chao, global market strategist at Invesco in Singapore. Still, the developments are “unlikely to have any lasting effects on the economy and financial markets.”

Investors are assessing what’s next for South Korea after the opposition Democratic Party said it will pursue charges of treason and impeachment against Yoon for declaring martial law illegally. The Bank of Korea said it will increase short-term liquidity and take “active” steps in currency markets as needed to ensure stability.

“There’s certainly some lingering uncertainty — but the quick response from Korean authorities means that impact on the region could remain limited,” said Charu Chanana, chief investment strategist at Saxo Markets.

In China, the central bank increased its support for the yuan by setting a significantly stronger-than-expected daily reference rate. The yuan climbed.

Oil steadied after the biggest advance in more than two weeks. Gold stabilized after rising on Tuesday as political turmoil in South Korea and France buoyed demand for haven assets.

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