Tepid stock gains in Europe, US slips

LONDON: European stock markets made tepid gains Wednesday as investors snapped up bargain shares following sharp losses last week, but Wall Street opened lower.

London's benchmark FTSE 100 index was 0.4 percent higher in afternoon, having been up 1.0 percent before the government unveiled its latest budget.

The pound, which sat just underneath $1.40 before the budget announcement, pulled back after the government cut back its 2021 growth forecast to 4.0 percent from 5.5 percent.

Frankfurt and Paris stocks both won around 0.1 percent in afternoon trading.

Wall Street opened lower, with the Dow shedding 0.1 percent.

Oil prices advanced strongly on the eve of a key OPEC+ producers' meeting.

"The stock market is struggling to figure out which way is up and which way is down; hence, it has been moving mostly sideways," said market analyst Patrick J. O'Hare at Briefing.com.

Stock markets suffered a sharp sell-off last week on the back of rising US Treasury yields, an indication of rising interest rates.

And while the bond market has steadied this week, traders remain cautious, with US markets slipping Tuesday despite a drop in bond yields.

Investors remain on guard over concerns about asset bubbles -- and a potential surge in inflation that could herald interest rate hikes in the long run.

In London, British finance minister Rishi Sunak presented the goverment's budget which includes plans to ramp up tax on company profits to 25 percent from 2023 as it tries to tackle surging debt taken on to prop up the economy during Covid-19 lockdowns.

Sunak had said on Tuesday that he will extend his multi-billion-pound furlough scheme paying the bulk of wages for millions of private-sector workers.

Hospitality, travel and real estate firms rallied on hopes of a budget boost as Britain looks to reopen its shattered economy, which tanked almost ten percent last year.

"With business lifelines expected to be extended and a dose of extra support likely to be administered to ailing shops, pubs and restaurants, there has been a buoyant start for hospitality and landlords in London," said Hargreaves Lansdown analyst Susannah Streeter.

"Airlines, who have relied heavily on the furlough scheme, are also higher."

Pub operator Whitbread was among the top FTSE risers with a gain of 4.6 percent, while householder Persimmon rose 5.7 percent and airline giant IAG climbed 5.0 percent.

Asian equities rose strongly Wednesday following losses the previous day, as investors track global progress in fighting the deadly pandemic.

Sentiment was buoyed after the White House said Tuesday that it would have enough shots to immunise every adult by the end of May, two months earlier than first thought.

Upbeat news on vaccines, the expected passage of US President Joe Biden's stimulus package, slowing infection rates and easing lockdowns are contributing to the narrative that the global economy will see a burst of activity from the second half of the year.

Key figures around 1430 GMT -

London - FTSE 100: UP 0.4 percent at 6,639.68 points

Frankfurt - DAX 30: UP 0.1 percent at 14,056.34

Paris - CAC 40: UP less than 0.1 percent at 5,814.59

EURO STOXX 50: DOWN less than 0.1 percent at 3,706.80

New York - Dow: DOWN 0.1 percent at 31,356.55

Tokyo - Nikkei 225: UP 0.5 percent at 29,559.10 (close)

Hong Kong - Hang Seng: UP 2.7 percent at 29,880.42 (close)

Shanghai - Composite: UP 2.0 percent at 3,576.90 (close)

Euro/dollar: DOWN at $1.2052 from $1.2091 at 2200 GMT

Pound/dollar: DOWN at $1.3953 from $1.3955

Euro/pound: DOWN at 86.39 pence from 86.64 pence

Dollar/yen: UP at 106.97 yen from 106.69 yen

Brent North Sea crude: UP 1.0 percent at $63.72 per barrel

West Texas Intermediate: UP 1.9 percent at $60.89 per barrel