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Tuesday, March 21, 2023

Global equities get boost from growth outlook

Global equities get boost from growth outlook

LONDON: Global stock markets rose Tuesday on the back of optimism on the world economic outlook sparked by upbeat data from China, with investors happy to put geopolitical worries on the backburner for now.

The British pound zoomed to its highest dollar level since the 2016 Brexit referendum on strengthening UK interest rate hike hopes and solid data.

“With geopolitical concerns appearing to ease in recent days, risk appetite is gradually returning to financial markets,” said Craig Erlam at OANDA.

He said investors sentiment remained fragile, but in the absence of escalation in Syria after weekend US, British and French air strikes, markets seemed poised to continue clawing back recent losses.

“The concerns about geopolitical tensions in relation to Syria and Russian sanctions have faded a little,” agreed CMC Markets analyst David Madden.

– Watch Netflix –

“The broadly positive economic data out of China overnight left traders slightly more hopeful about the state of the global economy,” he said.

The IMF on Tuesday said that the global economy is expected to grow at a solid pace through next year, boosted by faster expansion in the United States and Europe, but that risks would build after that.

Wall Street showed solid gains approaching midday in New York following a round of strong earnings from Netflix, Goldman Sachs and others.

Netflix shares were up around eight percent after the company said it added 7.4 million new subscribers in the past quarter and ramped up profits with its strongest-ever revenue growth since launching its streaming service.

“Strong earnings have finally stepped out into the limelight, allowing geopolitical and trade risks to fade into the background,” said Jasper Lawler, head of research at London Capital Group.

Asian markets finished mixed, giving up early gains.

– In for a pound –

The British pound rallied to its highest dollar level since just after Britain’s shock EU exit referendum in June 2016, buoyed by expectations of Bank of England (BoE) interest rate hikes. Sterling reached $1.4377 before easing back in the late European afternoon.

“Sterling says ‘What Brexit?’,” commented LCG’s Lawler.

Economists expect the BoE to raise its key interest rate next month from the current level of 0.50 percent.

– Key figures around 1540 GMT –

New York – Dow: UP 1.1 percent at 24,839.64 points

London – FTSE 100: UP 0.4 percent at 7,226.05 (close)

Frankfurt – DAX 30: UP 1.6 percent at 12,585.57 (close)

Paris – CAC 40: UP 0.8 percent at 5,353.54 (close)

EURO STOXX 50: UP 1.1 percent at 3,477.91

Tokyo – Nikkei 225: UP 0.1 percent at 21,847.59 (close)

Hong Kong – Hang Seng: DOWN 0.8 percent at 30,062.75 (close)

Shanghai – Composite: DOWN 1.4 percent at 3,066.80 (close)

Euro/dollar: DOWN at $1.2344 from $1.2380 at 2100 GMT

Dollar/yen: UP at 107.13 yen from 107.12

Pound/dollar: DOWN at $1.4314 from $1.4339

Oil – Brent North Sea: UP 14 cents at $71.56 per barrel

Oil – West Texas Intermediate: UP 3 cents at $66.25

Copyright AFP (Agence France-Press), 2018

Source: Brecorder

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