Global equities began the week on an upward swing as the U.S. dollar weakened broadly, despite edging higher against the Japanese yen. Investor sentiment was largely influenced by ongoing political uncertainties across several major economies, according to Reuters reports.
In Argentina, the ruling party under President Javier Milei suffered a major electoral setback in Buenos Aires province, sending the peso to a historic low with losses of up to 7.5 per cent. The shock result also drove Argentine stocks down by more than 10 per cent, intensifying economic instability.
Japan also faced political turbulence after the resignation of Prime Minister Shigeru Ishiba, which triggered a fall in the yen as markets braced for the likelihood of a more dovish leadership.
Meanwhile, France’s political climate remained uncertain as Prime Minister François Bayrou risked losing his position, sparking fresh concerns about policy stagnation in the eurozone’s second-largest economy.
In Indonesia, the stock market surrendered early gains to end lower despite a stronger rupiah, following the unexpected removal of Finance Minister Sri Mulyani Indrawati in a cabinet reshuffle.
Investors also responded to expectations that the U.S. Federal Reserve could move to cut interest rates soon, after August’s labour data came in weaker than anticipated. This contributed to a fourth straight day of declines in Treasury yields.
MSCI’s index tracking global stocks climbed 0.35 per cent to 959.07, while the pan-European STOXX 600 index gained 0.28 per cent. Emerging market equities advanced 0.58 per cent, buoyed by improved risk appetite.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.67 per cent, while Japan’s Nikkei index jumped 1.45 per cent to close at 43,643.81 points.
On Wall Street, performance was mixed. The Dow Jones Industrial Average dipped slightly, while the S&P 500 and Nasdaq added 0.31 per cent and 0.82 per cent, respectively, as traders awaited crucial economic reports scheduled later in the week.
Commodity markets also saw notable movements. Oil prices edged higher, while gold surged past $3,600 an ounce, supported by rising speculation that the Fed could announce an interest rate cut in its next meeting.
Analysts say global investors are carefully weighing economic optimism against heightened political risk in several regions. Additionally, the weakening dollar is seen as a catalyst boosting returns in foreign stock markets.
