WuXi AppTec Drops 10% After US Trade Restrictions

Asian stocks faltered due to weak Chinese economic data, with the CSI 300 falling to a seven-month low and the CSI Tourism Index hitting a record low. Hong Kong-listed shares of WuXi AppTec plummeted over 10% after the US House passed a bill restricting business with Chinese biotech firms. European markets are set for mixed openings, while key UK and US economic reports are awaited ahead of potential central bank rate cuts.

Equities

The FTSE 100 rose 1.1% on Monday, with a strong performance from travel and leisure stocks, led by gambling group Entain. Entain's shares surged 5.3% after the company forecast higher-than-expected online revenue growth for the second half of its financial year. Meanwhile, Burberry shares dropped 4.9%, hitting their lowest level since November 2009 after Barclays downgraded the luxury retailer to “underweight.” The broader personal goods sector also struggled, dropping 3.1%, its lowest level in nearly 15 years. HSBC shares gained 1.9% amid reports that the bank is considering merging its commercial and investment banking divisions to reduce costs.

In the US, major stock indices closed sharply higher. The Dow Jones Industrial Average rose 1.2%, or 484.28 points, ending at 40,829.69, while the S&P 500 climbed 1.16%, closing at 5,471.07. The Nasdaq Composite added 1.16%, finishing at 16,884.60. After a difficult week, US tech stocks rebounded, with dip-buying driving much of the day’s gains. Markets were buoyed by expectations that the Federal Reserve will cut interest rates, possibly by 25 basis points at next week’s meeting.

Crude oil prices also increased, with US crude rising 1.54% to $68.71 per barrel and Brent crude up 1.10%, settling at $71.84. Concerns about supply disruptions from a potential hurricane hitting Louisiana added to the upward momentum in oil prices.

The dollar firmed against a basket of currencies, driven by optimism surrounding the upcoming Consumer Price Index report and tempered expectations of a large Federal Reserve rate cut. The euro weakened 0.42% to $1.1037, while the British pound slipped 0.39% to $1.3072. Gold prices edged higher by 0.4% to $2,505.75 per ounce, as investors awaited further data on inflation.

Forex & Commodities

The US dollar strengthened on Monday, recovering from recent losses against major currencies. It rose 0.4% against the Japanese yen to 142.84 and gained 0.4% against the euro, pushing the euro down to $1.1041. The British pound fell to a two-week low of $1.3068 as traders awaited UK economic data, which could influence the Bank of England's policy moves.

Gold prices dipped slightly by 0.1% to $2,502.80 per ounce, pressured by a stronger dollar. Investors are focusing on the upcoming US inflation data, which could offer insight into the Federal Reserve's next interest rate move. Traders see a 71% chance of a 25-basis-point rate cut at the Fed's meeting next week.

Oil prices rose about 1%, supported by concerns over potential disruptions to production as a hurricane approaches the US Gulf Coast. Brent crude settled at $71.84 per barrel, up 1.1%, while US West Texas Intermediate (WTI) increased by 1.5% to $68.71. However, Morgan Stanley has lowered its Brent price forecast for the fourth quarter to $75 per barrel, citing concerns about weak demand.