London (AFP) – Stock markets extended a rally Tuesday on optimism that the US Federal Reserve will cut interest rates this year.
Friday’s big miss on US jobs creation for April, a largely well-received earnings season and soothing comments about the rates outlook by central bank chief Jerome Powell have combined to push equities higher.
“Powell has…played a key role in driving market sentiment, with recent comments from the Fed Chair shifting market expectations towards a November cut instead of December,” noted Joshua Mahony, chief market analyst at Scope Markets.
Positive soundings out of Beijing on help for China’s struggling economy have given an added boost, as have hope of rate cuts in Europe.
London reached yet another record high Tuesday.
“This week is light on high-profile economic data, but heavy on Fed members hitting the speaking circuit,” said Chris Larkin at E*Trade from Morgan Stanley.
“Traders will be dissecting any comments they make about potential rate cuts.”
Focus is also on the first-quarter earnings season.
Swiss banking giant UBS on Tuesday said net profit rose 71 percent to nearly $1.8 billion in the January-March period, far exceeding expectations, after two quarters in the red owing to its mammoth takeover of Credit Suisse.
Switzerland’s biggest bank said its turnover increased by 46 percent to $12.7 billion, largely thanks to its investment banking arm, which had been the key part in the mega-merger.
UBS shares rallied on the Swiss stock exchange, rising more than nine percent in afternoon trading.
On the downside, shares in BP eased one percent after the British energy giant said its net profit slumped 72 percent in the first quarter, as gas prices declined from a year earlier.
Profit after tax tumbled to $2.3 billion from $8.2 billion in the first three months of 2023.
Shares in Disney tumbled 8.5 percent as trading got underway in New York despite reporting its first streaming profit.
“Expectations for Disney’s earnings were high, as the share price has risen by nearly 30 percent year-to-date,” said Kathleen Brooks, research director at XTB.
“With a decent rally coming into these results, nothing less than perfection was acceptable to the market,” she added.
Disney saying this quarter’s entertainment revenues were softer than expected may have also spooked investors, Brooks said.
– Key figures around 1330 GMT –
New York – Dow: UP 0.1 percent at 38,902.74 points
New York – S&P 500: UP 0.1 percent at 5,188.17
New York – Nasdaq Composite: UP less than 0.1 percent at 16,355.16
London – FTSE 100: UP 1.3 percent at 8,321.15
Paris – CAC 40: UP 0.7 percent at 8,054.18
Frankfurt – DAX: UP 1.1 percent at 18,365.91
EURO STOXX 50: UP 1.0 percent at 5,004.01
Tokyo – Nikkei 225: UP 1.6 percent at 38,835.10 (close)
Hong Kong – Hang Seng Index: DOWN 0.5 percent at 18,479.37 (close)
Shanghai – Composite: UP 0.2 percent at 3,147.74 (close)
Euro/dollar: UP at $1.0781 from $1.0772 on Monday
Pound/dollar: UP at $1.2599 from $1.2564
Dollar/yen: UP at 154.28 yen from 153.86 yen
Euro/pound: UP at 85.84 from 85.72 pence
West Texas Intermediate: DOWN 0.4 percent at $78.19 per barrel
Brent North Sea Crude: DOWN 0.4 percent at $83.01 per barrel
burs-rl/lth
© 2024 AFP
