Tech stocks like Apple could benefit from new momentum in markets
London (AFP) - Positive economic data from Europe prodded the continent’s stock markets higher Tuesday, while momentum from Monday’s vaccine optimism and big-name dealmaking kept Wall Street buoyant.
Lower-than-feared British unemployment, at 4.1 percent in the second quarter, and German investor confidence at a level last seen in May 2000 both brightened investors’ moods in Europe.
London’s FTSE 100 closed up 1.3 percent, the Frankfurt DAX 30 gained 0.2 percent and France’s CAC 40 added 0.3 percent.
The upward moves in Europe were driven both by “data and following yesterday’s solid US advance,” Charles Schwab analysts commented.
But “the risk of a ‘no-deal’ Brexit and the potential economic harm that accompanies it increased” after the British government’s move to tear up parts of a hard-fought Brexit deal signed with Brussels early this year, in a re-run of past disagreements over Northern Ireland.
Legislation putting the move into effect passed its first reading in parliament Monday night.
In New York the Dow Jones added 0.5 percent driven by “progress on a COVID-19 vaccine/treatment, yesterday’s flood of M&A activity, and another dose of upbeat global economic data,” Schwab wrote.
Upbeat Chinese figures on retail sales and industrial output had earlier driven Asian stock markets higher.
- No surprises from Fed -
The euro fell against both the dollar and sterling, which continued its recovery after diving last week on Brexit woes.
OANDA senior analyst Edward Moya said there was likely to be little impact in the short term from a WTO finding that American tariffs on Chinese goods violated its rules.
Nevertheless, “while the Trump administration can effectively veto the WTO decision by filing an appeal over the next two months, the ruling will likely restrict ‘tariff man’ from relentless protectionism” in future, he predicted.
Meanwhile financial players can expect further support from the US central bank tomorrow.
“The Fed will be unable to be optimistic about the recovery until they see how the economy performs when the second wave of the coronavirus hits,” paving the way for policymakers to keep economic stimulus in place, Moya said.
Fed chief Jerome Powell “will likely reiterate the need for Congress to do more” to support the US economy, he added, with President Donald Trump’s son-in-law and senior adviser Jared Kushner saying Tuesday any new fiscal package may have to wait until after the November 3 presidential election.
- Key figures around 1530 GMT -
London - FTSE 100: UP 1.3 percent at 6105.54 points (close)
Frankfurt - DAX 30: UP 0.2 percent at 13,217.67 (close)
Paris - CAC 40: UP 0.3 percent at 5,067.93 (close)
EURO STOXX 50: UP 0.5 percent at 3,332.26
New York - Dow Jones: UP 0.5 percent at 28,118.58
Tokyo - Nikkei 225: DOWN 0.4 percent at 23,454.89 (close)
Hong Kong - Hang Seng: UP 0.4 percent at 24,732.76 (close)
Shanghai - Composite: UP 0.5 percent at 3,295.68 (close)
Euro/dollar: DOWN at $1.1850 from $1.1862 at 2050 GMT
Pound/dollar: UP at $1.2863 from $1.2845
Euro/pound: DOWN at 92.12 pence from 92.35 pence
Dollar/yen: DOWN at 105.48 yen from 105.73 yen
West Texas Intermediate: UP 2.2 percent at $38.06 per barrel
Brent North Sea crude: UP 1.8 percent at $40.33 per barrel