Tech Fuels Equity Gains as Gold, Copper Hit Record: Markets Wrap

(Bloomberg) — The Nasdaq 100 is poised to wipe out December’s losses as revived appetite for technology stocks powered gains across global equity markets. Gold, silver and copper climbed to record highs.

Futures on the gauge rose 0.5% after a near 3% rally over the past two sessions. Tech and mining shares led advances in Europe. In Asia, benchmarks most exposed to artificial-intelligence demand, including South Korea’s Kospi, also outperformed.

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Significant price moves in commodities went beyond record-setting metals, with oil climbing amid heightened geopolitical tensions after the US stepped up a blockade on Venezuela. Global bond markets remained under pressure, led by a second day of declines in Japanese debt following Friday’s interest-rate hike by the Bank of Japan.

Hopes for a year-end rally in equities are growing after dip buyers late last week helped US stocks rebound from a slide that was driven by doubts over AI exuberance and the scope for Federal Reserve easing. The S&P 500 Index added 0.9% on Friday for a second straight gain, erasing the week’s loss as volumes spiked during a quarterly options and futures expiry.

“Markets are riding a risk-on liquidity wave into year-end as resilient US growth underpins earnings next year, while a lower Fed fund rate eases financial conditions,” said Desmond Tjiang, chief investment officer for equities and multi-asset investment at BEA Union Investment. “Fears of AI capex and returns also recede on improving compute economics.”

Precious metals rallied, with their haven appeal boosted by geopolitical tensions and expectations of more Fed rate cuts. Looser monetary policy typically is a tailwind for gold and silver, which don’t pay interest.

Spot gold strengthened more than 1.5% to surpass the previous record of $4,381 an ounce set in October. Silver also climbed to a record and platinum advanced for an eighth straight session.

Brent climbed above $61 a barrel with US forces boarding one tanker and pursuing another one near Venezuela within weeks of first capturing a vessel. Washington has been stepping up pressure on Venezuela’s government, with Trump aiming to choke off its key revenue stream.

Copper approached $12,000 a ton at the tail end of a momentous year dominated by trade turmoil, tight supply and optimism for long-term demand. The metal is on track for its biggest annual gain since 2009.

Japan Yields

Japanese markets remained in focus after the central bank raised its benchmark interest rate to the highest in 30 years on Friday. Bank of Japan Governor Kazuo Ueda chose to keep his options open rather than bolster the yen, delivering a cautious rate hike that left the currency sliding toward levels which have triggered intervention in the past.

The yen, which had weakened to as much as 157.78 per dollar, found some strength on Monday as Atsushi Mimura, the nation’s chief currency official, said he was “deeply concerned” about what he termed as “one-directional, sudden moves,” especially after the monetary policy meeting. “We’d like to take appropriate responses against excessive moves,” Mimura told reporters.

Meanwhile, Japan’s benchmark 10-year yield climbed to a level unseen since February 1999. The two-year yield, which is sensitive to monetary policy expectations, rose to the highest since 1997.

“The sharp yen depreciation is seen as a factor pushing up yields, as it has fueled speculation that the timing of the next rate hike may be brought forward,” said Keisuke Tsuruta, a senior fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities.

Corporate News

• China Vanke Co., once the country’s biggest developer before it succumbed to an unprecedented property crisis, is heading into one of the most consequential days since it was founded in the 1980s as creditors holding a local bond finish voting Monday on several requests.

• Harbour Energy Plc agreed to acquire LLOG Exploration Co. for $3.2 billion, marking the UK company’s entry into the deepwater US Gulf of Mexico.

• A group of private equity firms led by Permira and Warburg Pincus has agreed to acquire Clearwater Analytics Holdings Inc. in a deal valuing the investment and accounting software maker at $8.4 billion including debt.

• Seven & i Holdings Co.’s chief executive is pressing its US convenience-stores business to deliver a faster turnaround as the retailer seeks a public listing of the unit to fund new investment and lift shareholder returns.

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 was little changed as of 8:22 a.m. London time

• S&P 500 futures rose 0.3%

• Nasdaq 100 futures rose 0.5%

• Futures on the Dow Jones Industrial Average rose 0.1%

• The MSCI Asia Pacific Index rose 1%

• The MSCI Emerging Markets Index rose 1%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%

• The euro rose 0.1% to $1.1727

• The Japanese yen rose 0.2% to 157.42 per dollar

• The offshore yuan was little changed at 7.0319 per dollar

• The British pound rose 0.3% to $1.3421

Cryptocurrencies

• Bitcoin rose 1.7% to $89,648.04

• Ether rose 2.5% to $3,047.24

Bonds

• The yield on 10-year Treasuries advanced one basis point to 4.16%

• Germany’s 10-year yield was little changed at 2.90%

• Britain’s 10-year yield advanced one basis point to 4.53%

Commodities

• Brent crude rose 0.9% to $60.99 a barrel

• Spot gold rose 1.7% to $4,412.03 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Shikhar Balwani, John Cheng and Chris Bourke.

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