Global stocks rose notably on Tuesday, with hopes for progress in US-China trade talks and expectations for a pause in the Fed’s rate hike cycle helping underpin sentiment.
Meanwhile, investors shrugged off data showing that growth in the Eurozone almost stalled in January. IHS Markit’s composite final PMI dipped to 51.0 in the month from December’s 51.1, its lowest reading since July 2013.
The Reserve Bank of Australia kept the country’s interest rate unchanged at a record low level, slightly lowering the key economic forecasts for 2019 and 2020.
Asian markets recap
Shares of Australian banks rose after the Australian central bank’s decision to keep the country’s interest rate unchanged at a record low level. The local index S&P ASX 200 posted a significant increase of 114.70 points, or 1.95%, ending the day at a level of 6,005.90 points.
The Reserve Bank of Australia has admitted that internal and external risks have risen against the backdrop of the downturn in the real estate sector, and its manager, Philip Lowe, has slightly lowered its key forecasts by saying that “the main internal uncertainty remains related to the outlook for household spending and the effect of lowering house prices in some cities”. The central bank predicts that the economy will grow by about 3% this year and “a little less” in 2020 due to shrinking exports. Current projections are revised downwards compared to the ones announced in November. Also, the inflation forecast for this year is down from 2.25% to 2%.
The shares of National Australia Bank and Westpac rose by 3.91% and 7.36% respectively, while those of ANZ and Commonwealth Bank added 6.5% and 4.69%, respectively.
At other stock indices in the Asia-Pacific region, Japanese blue-chip index Nikkei 225 fell by 0.19% to 20,844.45 points. The stocks of Toyota Motor and Sony appreciated by 0.74% and 0.30% respectively, while those of Honda Motor recorded a drop of 2.44%.
Chinese continental index Shanghai Composite added 33.66 points, or 1.30%, to its value and ended the day at 2,618.23 points.
Hong Kong’s index Hang Seng rose by 0.21% to 27,990.21 points.
The stocks price of Alibaba Group dropped by 0.76%, while China Petroleum & Chemical Corporation rose by 0.13%.
The South Korean index Kospi ended the trading session on red territory with a fall of 0.06% to 2,203.46 points.
The focus of investors was also the visit of German Chancellor Angela Merkel to Japan. Merkel said earlier today that Germany needs guarantees that the Chinese company Huawei Technologies will not collect data for the Chinese state before the telecom equipment provider joins the country’s 5G network.
Huawei faces international problems because of its alleged ties to the authorities in China and fears that Beijing may use its technology for espionage. The company denies all charges.
European markets mid-session recap
German stocks are on uptrend as the US dollar stayed firm and Google parent Alphabet reported fourth-quarter earnings that exceeded analysts’ expectations. The index DAX 30 is up by 119.29 points, or 1.07%, to 11,295.87 points at 10:30 GMT, tracking gains elsewhere across Asia after the financial services royal commission refrained from recommending harsher measures against Australian banks. Banks Commerzbank and Deutsche Bank were up by 0.5% and 0.8%, respectively. Automakers BMW, Daimler, and Volkswagen were also moving higher.
British stocks rallied on Tuesday, with higher oil prices and a solid earnings update from heavyweight BP helping boost sentiment. The local index FTSE 100 is up by 1.19% to 7,117.67 points at mid-session. BP Plc soared 4.2% after it swung to a profit in the fourth quarter of 2018 and lifted dividend. RhythmOne jumped by 3.8%, a day after Taptica announced the acquisition of the company for 176 million USD in an all-stock deal. The stocks of the transport group FirstGroup dropped by 1.6% on reports that it is selling one of its largest regional bus divisions.
French index CAC 40 was up 46 points, or 94%, to 5,046.95 points at 10:30 GMT. Air Liquide rose by 0.6% after it announced an acquisition of Sleep & Health SA and Megamed AG.
Wall Street pre-session recap
Wall Street stock index futures are moving higher on Tuesday morning, as investors looked ahead to another set of corporate results and a key speech from President Donald Trump.
At around 5:45 a.m. ET, Dow futures are growing by 74 points, indicating a positive open of 71.63 points. Futures of the S&P is slightly up, while Nasdaq points for a negative opening amind unsatisfied financial report of Alphabet.
On the data front, investors are likely to monitor services PMIs and ISM nonmanufacturing numbers due at 9.45 and 10 a.m. ET, respectively.