European Stocks Open Lower, Nikkei 225 Falls 2%: Market Updates

South Korea’s economy demonstrated robust growth in the first quarter of 2024, beating economists’ expectations. The country’s Gross Domestic Product (GDP) expanded by an impressive 3.4%, marking its highest quarterly growth rate since the fourth quarter of 2021.

On a quarter-on-quarter basis, the GDP rose by 1.3%, surpassing Reuters’ estimated growth of 0.6% for the same period.

South Korea’s growth was mainly fueled by a 0.9% increase in exports, attributed to the surge in exports of IT items, particularly cellular phones. In contrast, imports declined by 0.7% due to reduced imports of electronic equipment.

With this impressive growth, South Korea continues to demonstrate its economic resilience and capacity for sustainable development, particularly in the face of recent challenges.

European stocks commenced Wednesday’s trading session with a slight decline. The benchmark Stoxx 600 index opened 0.2% lower at 8:15 a.m. London time.

Among the major European markets, the UK’s FTSE 100 managed to climb 0.5% after a five-day winning streak, while France’s CAC 40 was down 0.2%, and Germany’s DAX experienced a 0.5% decline.

This subdued opening hints at the potential impact of various factors, as traders monitor the economic landscape and corresponding market dynamics.

Japan’s Nikkei 225 index recorded a notable decline of 2.1% during afternoon trading, symbolizing a downward trend. The broader Topix index also exhibited a 1.64% drop.

Since reaching a peak in late March, the benchmark Nikkei 225 has experienced an 8.3% retracement.

Market participants eagerly anticipate the outcome of the Bank of Japan’s monetary policy decision, set to occur on Friday. This decision holds particular importance as it entails assessing the inflation outlook amidst a backdrop of a weaker yen, higher oil prices, and strong wage growth.

Moreover, on Thursday, the yen depreciated further, breaching the 155 level against the U.S. dollar, representing a 34-year low.

Despite SK Hynix, a South Korean chipmaker, posting its highest operating profit in nearly two years, its stock experienced a decline of almost 3%.

For the first quarter of 2024, SK Hynix achieved a remarkable operating profit of 2.89 trillion South Korean won ($2.1 billion), representing a substantial 734% year-on-year surge. Additionally, its net profit amounted to 1.92 trillion won.

The chipmaker cited the increase in AI server product sales, primarily driven by its expertize in AI memory technology, as the contributing factor behind this exceptional performance. SK Hynix remains optimistic, stating that it has entered a clear rebound phase after a prolonged downturn.

Despite the stock market decline, this financial feat demonstrates the resilient potential and competitiveness of the South Korean memory chip industry. SK Hynix’s consistent progress reflects positively on the nation’s integrated circuit market.

Anastasia Amoroso, iCapital’s chief investment strategist, expresses optimism for the S&P 500’s performance, predicting that it could reach 5,500 by the end of the year.

This projection reflects an 8% increase for the benchmark index, which closed at 5,071.63 on Wednesday. Notably, Amoroso highlights the potential outperformance of semiconductor stocks moving forward, speaking of an attractive entry point for investors.

Encouraging factors supporting her outlook include robust corporate earnings, increased consumer spending, and the revival of global manufacturing momentum.

This positive sentiment demonstrates growing confidence within the investment community, potentially fueling further positive market sentiment and potential market growth.

The extended trading hours witnessed significant movements for several stocks, including Meta and IBM, among others. Further details and updates will be provided as the situation evolves.