London (AFP) – Stock markets firmed Tuesday and oil prices retreated, helping to temper worries about spikes to government borrowing costs. European stock markets climbed around half a percent in midday trade after Tokyo and Hong Kong closed with gains of one percent. On Wall Street, the technology-focused Nasdaq index closed at a record high Monday, driven by advances in stocks linked to artificial intelligence.
Oil futures were down about 2.5 percent Tuesday, but the international benchmark Brent North Sea remained close to the psychological $100 a barrel level. “Brent crude oil fell back below $100, much to the relief of the market,” noted Dan Coatsworth, head of markets at AJ Bell. “This gave a boost to interest-rate sensitive stocks including real estate and consumer cyclicals.”
“Gulf exports excluding Iran averaged 19.2 mb/d in September, equivalent to 81 percent of pre-war levels. Crude exports were back to 91 percent of pre-war levels, while refined product exports were only around 60 percent,” added Arne Lohmann Rasmussen, analyst with Global Risk Management. In the UK, the average diesel price at the pump has struck a record high according to official data.
There remains plenty of uncertainty among traders over the Middle East crisis, which is putting pressure on central banks to hike interest rates to combat energy inflation. This has pushed government bond yields up to levels not seen in decades, heightening worries about ballooning debt. Analysts have pointed out that the race to build out AI data centres, servers, and chips has compounded that problem, with tech titans no longer able to rely on their vast piles of cash.
Borrowing by firms including Google, Amazon, and Microsoft hit around $500 billion in the nine months since January, and Goldman Sachs expects a further ramp-up in 2027, to $1.2 trillion. “This is not something that we’ve seen before,” said Chris Della Fave, senior vice president at fundraising advisory firm Post Oak Group, who estimates that AI accounts for 25 percent of all corporate bond issuance — up from four percent two years ago.
In company news, UK online fashion giant Asos saw its share price slump more than 10 percent in London trading Tuesday after customers reportedly received a mobile notification claiming its systems had been hacked.
– Key figures at around 1100 GMT –
London – FTSE 100: UP 0.5 percent at 10,550.69 points
Paris – CAC 40: UP 0.6 percent at 7,880.66
Frankfurt – DAX: UP 0.6 percent at 25,405.09
Tokyo – Nikkei 225: UP 1.1 percent at 70,683.98 (close)
Hong Kong – Hang Seng Index: UP 1.0 percent at 24,280.56 (close)
Shanghai – Composite: Closed for a holiday
New York – Dow: UP 0.2 percent at 51,267.90 (close)
Euro/dollar: UP at $1.1242 from $1.1217 on Monday
Pound/dollar: UP at $1.3246 from $1.3221
Dollar/yen: UP at 158.17 yen from 157.99 yen
Euro/pound: UP at 84.86 pence from 84.84 pence
Brent North Sea Crude: DOWN 2.4 percent at $97.89 per barrel
West Texas Intermediate: DOWN 2.5 percent at $87.22 per barrel
© 2024 AFP
