BHP bids for Anglo American, BOJ Maintains Policy

Equities

On Thursday, Britain's FTSE 100 Index achieved its third consecutive record high, closing 0.5% to reach an all-time peak of 8,105.59 points. This surge was primarily led by Anglo American, which soared 16.1% to over a 10-month high following a buyout offer from BHP Group. The proposal valued Anglo American's share capital at $38.8 billion, making this one of the standout movements in the market.

AstraZeneca shares rose by 5.9% after the company reported quarterly revenue and profit figures that exceeded market expectations. Similarly, Unilever saw a 5.7% increase in its stock value after announcing first-quarter sales growth that surpassed forecasts, supporting a 3.1% rise in the personal care, drug, and grocery stores index.

Wall Street experienced a less favourable day with major indices closing lower. The Dow Jones Industrial Average fell by 0.98% to 38,085.80, the S&P 500 dropped 0.46% to 5,048.42, and the Nasdaq Composite declined by 0.64% to 15,611.76. This downturn was influenced by slower-than-expected US GDP growth and an uptick in inflation, which dampened investor hopes for an imminent Federal Reserve rate cut.

Meta Platforms saw its shares plunge nearly 11% following disappointing results, heavily influencing the communications sector, which ended as one of the biggest losers in the S&P 500. On the positive side, shares of Alphabet and Microsoft showed resilience, advancing in extended hours trading after both companies surpassed Wall Street’s quarterly earnings expectations.

In contrast, International Business Machines (IBM) fell by 8% after it announced a $6.4 billion acquisition of HashiCorp alongside disappointing first-quarter revenue figures. Similarly, Caterpillar's shares dropped 7% after the company revised its second-quarter sales forecast downwards, reflecting easing demand for its construction equipment.

Southwest Airlines also saw a near 7% decline in its share price as it cut its projections for new aircraft deliveries from Boeing for the third time in 2024. Meanwhile, rising gold prices provided a silver lining for Newmont, the world's largest bullion miner, whose shares gained 12% after reporting first-quarter profits that beat estimates.

Forex & Commodities

On Thursday, the US dollar fell after reports indicating a slower-than-anticipated economic growth in the US, with GDP expanding at a 1.6% annualised rate against the expected 2.4%. Despite this, the dollar strengthened slightly against the yen, touching a 34-year high at 155.75 yen, and the euro also saw gains against the yen, reaching a 16-year peak.

Sterling improved, climbing 0.35% to $1.2504, while the euro appreciated by 0.26% to $1.0725 against the dollar. Market analysts now anticipate that the Federal Reserve might delay interest rate cuts, with futures markets reflecting a reduced likelihood of a rate reduction by September, given the robust inflation data.

In the commodities sector, gold market sentiment was influenced by strong earnings from Newmont, the world’s largest gold miner.

Oil markets also gained, with Brent crude futures climbing 0.4% to $89.32 a barrel, and US West Texas Intermediate crude advancing 0.3% to $83.80 a barrel.