Although negotiations between the USA and Iran continue, statements from the parties cause uncertainty regarding the process to continue. Iran announced that it would stop messaging with the United States in protest of Israel’s escalation of tensions in Lebanon.
Following this, US President Donald Trump met with Israel and Hezbollah and stated that the parties “agreed” not to “attack each other”. Despite Iran’s statement that it suspended negotiations with the United States, Trump stated that “negotiations are continuing at a rapid pace” with this country.
With no significant progress being made regarding peace between the USA and Iran, risk perception continues in global markets. While the rally led by artificial intelligence stocks carries the stock markets to record levels, the escalation of conflicts in the Middle East causes fluctuations in the markets.
While investors’ hopes for an agreement between the USA and Iran continue, energy prices remain on the agenda as the main determinant of the short-term outlook of inflation and interest rates due to the current conditions in the Strait of Hormuz.
As contradictory statements regarding the situation in the Middle East overshadowed the possibility of a peace agreement, the barrel price of Brent oil, which increased by 3.8 percent yesterday and approached 95 dollars, is today decreasing by 1.3 percent to 93.7 dollars, as hopes for an agreement continue despite the ongoing fragile environment.
The US 10-year bond interest rate is at 4.44 percent, with a decrease of 2 basis points, and the dollar index is at 99.2 percent, with a decrease of 0.1 percent. Supported by the decline in bond interest rates and the dollar index, gold is traded at $4,517 per ounce, with an increase of 0.7 percent.
RECORD LEVELS WERE SEEN IN THE NEW YORK STOCK EXCHANGE
A positive trend was observed in the New York stock exchange yesterday, due to the news flow that negotiations between the USA and Iran are continuing and the rally in technology companies.
Nvidia’s introduction of the new generation RTX Spark chip, developed in collaboration with Microsoft and capable of running advanced artificial intelligence applications directly on computers, supported the artificial intelligence-induced optimism in the markets.
After the company announced its new product for artificial intelligence, its shares gained 6.3 percent.
The manufacturing industry Purchasing Managers Index (PMI) of the Institute of Supply Management (ISM) in the USA, reaching 54 in May and recording its highest level since May 2022, was also effective in the rise in the New York stock market. However, this rise is thought to be due to businesses bringing their orders forward in the face of supply problems and rising prices due to the war with Iran.
On the other hand, American technology company Alphabet announced that it plans to issue a total of $80 billion worth of shares to finance its investments in artificial intelligence infrastructure.
With these developments, the Dow Jones index gained 0.09 percent, the S&P 500 index gained 0.26 percent and the Nasdaq index gained 0.42 percent. The Dow Jones index reached a record level with 51,161.10 points, the S&P 500 index with 7,617.66 points, and the Nasdaq index with 27,190.21 points. Index futures contracts in the USA started the day negatively.
EUROPEAN STOCK EXCHANGES WERE NEGATIVE
European stock markets were negative yesterday due to uncertainties about the US-Iran agreement and the reopening of the Strait of Hormuz.
According to macroeconomic data, the May manufacturing industry PMI in Germany was 50.1, and the Eurozone manufacturing industry PMI was above expectations with 51.6.
The seasonally adjusted unemployment rate in the Eurozone remained stable at 6.3 in April.
In the UK, the manufacturing industry Purchasing Managers Index PMI reached the highest level of the last 4 years with 53.9 points. The rise in this data was due to companies bringing forward their purchases in order to alleviate the expected price increases and supply chain disruptions due to the war in the Middle East.
On the other hand, the European Central Bank (ECB) is expected to adopt a hawkish attitude at its July meeting, if not in June.
With the wave of sales spreading throughout the defense sector, the shares of tank transmission manufacturer Renk decreased by 8 percent, while Germany’s leading defense company Rheinmetall finished the day with a loss of over 6 percent.
With these developments, the DAX 40 index in Germany lost 0.40 percent, the FTSE MIB 30 index in Italy lost 0.52 percent, the FTSE 100 index in England lost 0.68 percent and the CAC 40 index in France lost 0.45 percent. Index futures contracts in Europe started the day with a mixed trend.
ASIAN STOCK EXCHANGES ARE MIXED
With these developments, a mixed course is observed in Asian stock markets.
Inflation in South Korea in May increased from 2.6 percent to 3.1 percent on an annual basis, above expectations, strengthening expectations that the Central Bank of South Korea will increase interest rates in the following months.
The dollar/yen parity is on a horizontal course at 159.7, as predictions that the Japanese authorities may intervene in the foreign exchange market if necessary remain strong.
With these developments, the Kospi index in South Korea lost 1.4 percent, the Nikkei 225 index in Japan lost 1 percent, while the Hang Seng index in Hong Kong gained 1.5 percent. A horizontal trend is observed in the Shanghai composite index in China.
TURKISH ECONOMY HAS GROWED FOR 23 CONSECUTIVE QUARTERS
BIST 100 index at Borsa Istanbul, which followed a buying-oriented trend yesterday, closed the day at 13,703.96 points, gaining 0.30 percent in value.
The June futures contract based on the BIST 30 index in the Borsa Istanbul Futures and Options Market (VIOP) rose by 0.32 percent in the evening session compared to the normal session closing.
While the Dollar/TL exchange rate closed yesterday at 45.8973 with a 0.1 percent increase, today, at the opening of the interbank market, it is traded at 45.9315, 0.1 percent above the previous closing.
On the other hand, the Turkish economy grew by 2.5 percent in the first quarter of the year. Thus, the Turkish economy recorded growth for 23 consecutive quarters.
Analysts stated that the data agenda is calm in the country today, and that the Consumer Price Index in the Eurozone and the number of JOLTS job vacancies in the USA will be followed abroad. Technically, 13,800 and 13,900 points in the BIST 100 index are in a resistance position, and 13,600 and 13,500 levels are in a support position.
