LONDON: Major stock markets made solid gains and the dollar firmed Tuesday after more tech-driven record highs on Wall Street and as investors awaited fresh US economic data for a better handle on the outlook for inflation.
Traders are keeping an eye also on developments in France, with fears growing that a snap legislative election called by President Emmanuel Macron could see the far right succeed and cause political turmoil in the European Union.
The French situation has helped the London Stock Exchange reclaim from Paris the title of Europe’s biggest stock market by valuation.
The mood on trading floors was generally upbeat after the S&P 500 and Nasdaq chalked more record closes Monday thanks to continued buying of tech titans including Apple, Intel and Microsoft owing to optimism over artificial intelligence.
European stock markets rebound as focus switches to US
Analysts were confident markets were well placed for more gains owing to expected cuts to US interest rates and strong earnings.
“The S&P 500 hit its 30th record high of the year on Monday and this is driving enthusiasm towards European and Asian shares,” noted Kathleen Brooks, research director at XTB trading group.
Asian investors extended the buying, with Tokyo and Taipei closing up more than one percent, while there were also healthy gains in Shanghai, Sydney, Singapore, Mumbai, Bangkok, Seoul and Wellington.
However, Hong Kong reversed early gains to fall into the red.
In Europe, Frankfurt and Paris extended Monday’s advance after last week’s sell-off fuelled by the uncertainty in Europe. London was also higher around the half-way stage.
Investors brushed aside data Tuesday showing German investor confidence rose less than expected in June after Europe’s top economy saw an uptick in inflation following months of decline.
The ZEW institute’s closely-watched economic expectations index edged up to 47.5 points, from 47.1 points in May.
Although it was the index’s 11th consecutive increase, analysts surveyed by FactSet had been expecting a bigger improvement in morale to 49.5 points.
Investors will be keeping an eye on US retail sales, business inventories and industrial production data Tuesday, which will provide the latest snapshot of the economy.
Key figures around 1100 GMT
London - FTSE 100: UP 0.4 percent at 8,176.12 points
Paris - CAC 40: UP 0.5 percent at 7,610.92
Frankfurt - DAX: UP 0.4 percent at 18,137.56
EURO STOXX 50: UP 0.6 percent at 4,910.04
Tokyo - Nikkei 225: UP 1.0 percent at 38,482.11 (close)
Hong Kong - Hang Seng Index: DOWN 0.1 percent at 17,915.55 (close)
Shanghai - Composite: UP 0.5 percent at 3,030.25 (close)
New York - Dow Jones: UP 0.5 percent at 38,778.10 (close)
Euro/dollar: DOWN at $1.0718 from $1.0738 on Monday
Euro/pound: DOWN at 84.48 pence from 84.49 pence
Dollar/yen: UP at 158.10 yen from 157.72 yen
Pound/dollar: DOWN at $1.2690 from $1.2706
West Texas Intermediate: DOWN 0.1 percent at $80.23 per barrel
Brent North Sea Crude: DOWN 0.2 percent at $84.10 per barrel
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