FTSE 100 today: London shares poised to rise after US Fed maintains status quo; eyes on Apple and StanChart earnings

Moving markets today: Asia mixed post-US Fed decision, yen surges amid intervention speculation, oil prices up, Qualcomm beats expectations; spotlight on Apple and StanChart earnings 

In the US, stock markets closed with a mix of gains and losses following the Federal Reserve’s decision to keep its main interest rate steady, as was widely expected. The Fed hinted at the possibility of a future rate cut but expressed concerns about ongoing inflation trends. Meanwhile, Asian stock markets had a cautious start on Thursday. The Japanese yen strengthened against the dollar during late trading in New York, prompting speculation about possible intervention by Japanese authorities to support the currency. Oil prices rose in anticipation of the US replenishing its strategic reserve. Chipmaker Qualcomm exceeded market expectations for both sales and profits, leading to a 4 per cent surge in its shares during after-hours trading. Investors will be closely monitoring factory sector purchasing managers’ surveys in the euro area. Later in the day, all eyes will be on Apple’s earnings report, with anticipation of a significant sales decline and interest in the company’s plans for integrating AI into iPhones. Additionally, StanChart is among the companies scheduled to report their performance to shareholders on Thursday. Here are five key takeaways for your day. 

Qualcomm shares surge on strong earnings and upbeat outlook 

Qualcomm made a bullish projection on Wednesday, anticipating quarterly sales and adjusted profit to surpass what Wall Street had predicted. This optimistic outlook was fueled by increased demand for their higher-priced chips, particularly in Android smartphones incorporating artificial intelligence (AI) features. As a result, Qualcomm’s shares surged over 4 per cent in after-hours trading. 

In the quarter ending March 24, the San Diego-based company reported adjusted earnings of $2.44 per share on revenue of $9.39 billion. This exceeded analysts’ expectations, who had forecasted earnings of $2.33 per share on revenue of $9.35 billion, according to FactSet. Compared to the previous year, Qualcomm’s earnings grew by 13 per cent while sales rose by 1 per cent. 

Furthermore, Qualcomm highlighted a significant 40 per cent increase in sales to Chinese smartphone manufacturers during the first half of its fiscal year, suggesting a recovery in that market. 

Yen gains amid speculation of intervention 

In the later hours of trading in New York, the Japanese yen experienced a notable 2 per cent rise against the dollar, prompting analysts to speculate about potential intervention by Japanese authorities to bolster their currency. This surge saw the yen strengthening to ¥153 per dollar from ¥157.6 within a matter of minutes, around 4 pm New York time on Wednesday, marking its highest point in about two weeks. Notably, the yen had been trading at its weakest level against the dollar in 34 years before this surge, the FT reported. 

Takatoshi Ito, a former finance ministry executive and academic at Columbia University, suggested that Japanese officials may have intervened in the currency market to communicate their position, particularly regarding the significance of maintaining the yen’s value of around 160 yen to the dollar. These insights were shared with Reuters on Thursday. 

Oil prices surge on potential US strategic reserve replenishment 

Oil prices rebounded as speculation emerged that the US might initiate purchases of crude for its petroleum reserves. This uptick followed a recent dip to a seven-week low, driven by optimism surrounding a potential ceasefire in Israel-Gaza, uncertainties regarding US interest rate adjustments, and an increase in oil stockpiles, Reuters reported. 

Breaking a three-day downward trend, Brent crude futures for July edged up by 0.41 per cent to $83.79 per barrel, while US West Texas Intermediate (WTI) crude for June also saw a 0.46 per cent rise, reaching $79.36 per barrel. Both benchmarks experienced a significant decline of over 3 per cent on Wednesday, marking their lowest levels in seven weeks. 

What’s coming up 

Thursday’s focus will turn towards Apple’s earnings report, with market anticipation high for a potential decrease in sales and interest piqued about the company’s plans regarding AI implementation in iPhones. StanChart is also scheduled to present its performance to shareholders on the same day. 

Investor attention will be directed towards a range of purchasing managers’ surveys from the manufacturing sector in the eurozone, due to be published on Thursday. Analysts will be scrutinizing these surveys for any signs that support the notion of a continued build-up in momentum, as some anticipate a resurgence in economic activity in the latter part of 2024. 

Asia stocks sway amidst delays in Fed rate cut decision 

The Dow Jones Industrial Average ticked up by 0.23 per cent to hit 37,903.29, while the S&P 500 took a slight dip of 0.34 per cent to land at 5,018.39, and the Nasdaq Composite saw a 0.33 per cent decrease, closing at 15,605.48. Among the S&P 500’s 11 main sectors, energy stocks had the biggest drop, while utilities showed the most growth. 

In Asia, Japan’s Nikkei N225 started with a 0.7 per cent decline, South Korean shares slipped by 0.5 per cent, and Australian shares stayed steady. S&P 500 futures bounced back by 0.4 per cent following a 0.3 per cent slide in the cash index the previous day. 

Hong Kong stocks saw an uptick on Thursday morning, fueled particularly by mainland Chinese tech firms which saw significant increases. The Hang Seng index rose by 1.2 per cent early on, and the Hang Seng Tech index climbed by 2.3 per cent. 

Mainland China’s stock markets were closed for the Labour Day holiday. 

In commodities, copper prices went down in London, while gold prices went up overnight, reaching $2,324 during Asian trading.