The US stock market ended higher on Wednesday as technology shares rallied and concerns about stress in the banking sector eased. Investors appeared more relaxed about the health of the banking sector and the prospects for the path of interest rates, leading to an appetite for risk.
Semiconductor and mega-cap technology stocks contributed largely to the advances, with the tech-heavy Nasdaq 100 entering a bull market by rising 20% from its December low. The S&P 500 reached its highest close since March 6, two days before the collapse of Silicon Valley Bank, according to Dow Jones Market Data.
The CBOE VIX index, which is a gauge of expected equity market volatility, dropped below its long-run average of 20, indicating that traders are much calmer than in recent times.
On Thursday, US stocks closed higher again, posting back-to-back gains, as banking-sector fears eased and US economic data bolstered hopes for a peak in interest rates.
An improvement in market breadth was observed, with cyclical sectors like industrials, materials, and financials that had suffered in recent weeks helping to push the market higher. Revised data on US GDP growth showed that the economy grew slightly more slowly during the final months of 2022, with the annualized growth rate slipping to 2.6% from 2.7% seen in the previous estimate.
China’s factory activity expanded at a slower pace in March, while activity in the nation’s service and construction sectors rebounded more strongly in the wake of the Covid-19 pandemic.
The official manufacturing purchasing managers’ index declined to 51.9 in March from 52.6 in February. The official non-manufacturing PMI, which includes both service and construction activity, increased to 58.2 in March from 56.3 in February.
The subindex tracking service activity rose to 56.9 in March from 55.6 in February. The construction subindex surged to 65.5 in March, compared with 60.2 in February.
The South African Reserve Bank (SARB) raised its main lending rate by 50 basis points (bps) to 7.75%, against expectations of a 25 bps increase.
The Asia-Pacific markets traded higher on Friday, with technology stocks continuing to see renewed interest and leading gains on Wall Street, despite concerns of a further banking crisis.
Investors are awaiting Personal Consumption Expenditures data on Friday for further clues on inflation. The Fed has been raising interest rates to bring down inflation.
In India, Nifty rose on March 29 aided by positive global cues on an F&O expiry day, with a close of 0.76% or 129 points at 17080.7. It has closed at the highest level in five days. The next resistance for Nifty could be between 17207-17255, while 16985 could be a support.