Global stock markets gained on Monday as the U.S. dollar weakened broadly, even as it strengthened against the Japanese yen, with investors responding to political uncertainty in several countries, according to Reuters.
In Argentina, a heavy election defeat for President Javier Milei’s ruling party in Buenos Aires province sent the peso to a record low, dropping as much as 7.5 per cent and causing Argentine stocks to plunge over 10 per cent.
Japan also faced political instability after Prime Minister Shigeru Ishiba resigned, prompting the yen to fall against the dollar while investors anticipated a potentially dovish successor.
Reuters added that France’s political landscape remained fragile, with Prime Minister François Bayrou at risk of defeat, further raising concerns about economic paralysis in the eurozone’s second-largest economy.
In Indonesia, stocks gave up early gains to finish lower, even as the rupiah strengthened following the ousting of Finance Minister Sri Mulyani Indrawati in a cabinet shake-up.
The prospect of an imminent U.S. Federal Reserve interest rate cut, following weaker-than-expected labour data for August, contributed to declining Treasury yields for the fourth consecutive day.
MSCI’s gauge of global stocks rose 0.35 per cent to 959.07, while the pan-European STOXX 600 index advanced 0.28 per cent and emerging market stocks gained 0.58 per cent.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.67 per cent, while Japan’s Nikkei jumped 1.45 per cent to 43,643.81 points.
U.S. markets were mixed, with the Dow Jones Industrial Average slightly lower, while the S&P 500 and Nasdaq rose 0.31 per cent and 0.82 per cent, respectively, as investors awaited key economic data later in the week.
Oil prices recovered modestly, and gold surged past $3,600 an ounce, supported by expectations that the Fed will cut interest rates next week.
According to Reuters, global investors continue to balance economic optimism with political risks across major economies. Reuters added that currency movements, particularly the weakening dollar, are enhancing returns in foreign stock indices.