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Marketmind: Nvidia helps Nikkei over finish line

Published 22/02/2024, 05:32
© Reuters. Visitors and electronic screens displaying Japan's Nikkei stock quotation board are reflected on window glasses as the share average surged past an all-time record high scaled in December 1989, inside a building in Tokyo, Japan February 22, 2024.  REUTERS
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A look at the day ahead in European and global markets from Kevin Buckland

If Nvidia's eye-popping revenue forecasts were meant to keep the AI fervour pumping money into already-heated tech shares, it was hard to see it anywhere but in Japan on Thursday.

The Nikkei overcame some early nerves to finally surge as much as 2% to a record high above 39,000, putting it in blue sky territory after a 34-year gap from its previous "bubble" era peak.

But Chinese stocks struggled, with some exhaustion likely setting in after a seven-day winning stretch inspired by Beijing's stimulus measures. A subindex of Hang Seng tech shares has notably spent the day so far in the red.

Chinese hedge funds have been scrambling to soothe investor nerves after the slump in shares to five-year lows at the start of the month.

Nvidia's impact on the Wall Street reopen isn't in question though, with Nasdaq futures pointing 1.5% higher, after a lacklustre day of trading on Wednesday.

European traders also have a fairly lengthy list of macro indicators to look forward to, with PMIs from Germany, France and the euro zone as a whole, as well as from Britain. The euro area also has final readings for consumer inflation in January.

The euro and sterling have outperformed the dollar and yen over the past week, with traders betting the ECB and Bank of England will be later than the Fed in cutting rates, while the Bank of Japan moves with extreme caution on rate hikes.

The 10-year Treasury yield remains elevated at above 4.3%, but below the 4.4% level that some analysts flag as the threshold for a flare-up in equity market jitters.

A smaller pool of earnings today, but Nestle's could shed light on how tight consumers' purse strings are.

In Britain, Lloyds (LON:LLOY) and Anglo American (JO:AGLJ) are due to report.

Key developments that could influence markets on Thursday:

-Flash PMIs for Germany, France, euro zone and UK (all Feb)

-Final HICP for euro zone (Jan)

© Reuters. Visitors and electronic screens displaying Japan's Nikkei stock quotation board are reflected on window glasses as the share average surged past an all-time record high scaled in December 1989, inside a building in Tokyo, Japan February 22, 2024.  REUTERS/Issei Kato/file photo

-Earnings from Nestle, Lloyds, Anglo American

-US initial jobless claims, flash PMIs (Feb), existing home sales (Jan)

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