Global equities rallied Wednesday as US stock futures stabilized following a pullback in tech investment, while European markets were buoyed by stronger business activity and positive earnings.
The Euro STOXX Index added 1.3%, its best day in nearly two months, boosted by data showing that business activity in the eurozone increased last month, while the services industry returned to growth. The best performers were German Rational and Merck after well received results.
The MSCI Global Stock Index, which tracks stocks in 49 countries, traded 0.1% higher after selling from near-record highs on Tuesday. However, not everything was so rosy. The broadest Asia Pacific stock index outside Japan, MSCI, lost 0.4% for the fourth straight day, although Asian trading was sluggish due to holidays in Japan, China and South Korea.
India’s Nifty 50 Index rose 0.8% to close to its best day in a week as the central bank rolled out a series of measures to bolster the coronavirus-ravaged economy, including giving some small borrowers more time to pay off loans. Nasdaq futures rose 0.4% after falling sharply the day before, while S&P 500 futures also gained 0.3%.
The Nasdaq fell 1.9% on Tuesday as several major tech companies began taking profits, including Microsoft Corp, Alphabet Inc, Apple Inc and Amazon.com Inc. The inflated estimates were tested when US Treasury Secretary Janet Yellen said rate hikes might be needed to stem the economy from overheating.
She later declined to comment, but they reminded investors that rates should rise at some point in the future. “Some of her comments were apparently misinterpreted by the markets as she assumed the Fed would need a raise,” said James Eti, chief investment officer at Aberdeen Standard Investments.
“This market is really just as hectic and fragile.” The next focus for the markets looms on Friday, when US employment data is forecast to show a significant increase of 978,000 people, while by some estimates it will reach 2.1 million.
So far, Federal Reserve Chairman Jerome Powell has argued that the job market is still far from what it takes to start talking about cutting asset purchases. Federal Bank of Minneapolis President Neil Kashkari, the famous “dove”, said on Tuesday that the economy could take several years to return to full employment.
The Fed’s tenacious patience allowed the yield on US 10-year bonds to fall to 1.59% from last week’s high of 1.69%, although the market struggled to break below 1.53%. In Europe, Germany’s 10-year yield, a benchmark for the region, rose 1 basis point to -0.23%, albeit below its highest level since March 2020, reached on Monday.
The mere mention of higher US rates was enough to help the dollar regain some of its recent losses. The euro fell to $ 1.1999 and threatened to break through the important chart support in the 1.1995 / 1.2000 area. The break will open the way to the $ 1.1923 recovery target.
The dollar held at 109.45 yen, dodging resistance at 109.61. Against a basket of currencies, the dollar reached an almost two-week high of 91.448. The New Zealand dollar surged to $ 0.7173 after better-than-expected job data in the country.
In commodity markets, palladium rose 0.7% to $ 3,004, close to Tuesday’s record high, amid concerns over a shortage of metal used in vehicle emissions control devices. Gold remained at $ 1,777 an ounce.
Oil prices reached multi-week peaks as more countries opened their borders to travelers, improving the outlook for gasoline and jet fuel demand. Brent crude rose 1.2% to $ 69.69 a barrel, the highest since mid-March, while U.S. crude rose 1.1% to $ 66.43 a barrel, peaking since mid-March. March 8.
(Editing by Sam Holmes and Kim Coghill)
(This story was not edited by Devdiscourse staff and was automatically generated from a syndicated feed.)