18 C
New York
Wednesday, May 25, 2022

Carmakers help drive stocks recovery

Carmakers help drive stocks recovery

LONDON: Shares in the automakers helped European and US stocks push higher, with investors also reacting on Monday to political developments in eurozone big-hitters Germany and Italy.

Investors in London meanwhile eyed a key British budget announcement heading into Brexit, while Asian stock markets fluctuated with traders remaining on edge after last week’s global equities rout.

“European equities are rallying broadly in afternoon action, with the auto sector leading the way following a report suggesting China will cut its tax on car purchases by 50 percent, while Italian stocks are rallying amid relief as Standard & Poor’s (S&P) held off on downgrading the nation’s credit rating, even as it cut its outlook,” analysts at Charles Schwab wrote in a note to clients.

Milan’s FTSE Mib was up 2.4 percent in afternoon trading.

“The markets are shrugging off flared-up political uncertainty in Germany after Chancellor Angela Merkel announced she will not seek re-election of her party’s chair and signaled that this may be her last term as Chancellor,” they added.

Merkel announced on Monday she will step down as German chancellor at the end of her term, after voters again punished her fragile coalition in a regional poll.

Frankfurt’s DAX 30 index was 2.0 percent higher.

“Today is a tale of the two chancellors, with Angela Merkel’s decision to step down as the leader of the CDU grabbing the headlines ahead of Philip Hammond’s pre-Brexit budget,” said Joshua Mahony, market analyst at IG trading group.

London’s FTSE 100 index was up 1.9 percent ahead of the 1530 GMT unveiling of the budget that could nevertheless be scuppered by Brexit next year.

Shares in car firms were among the top gainers following a Bloomberg report that China, the world’s biggest auto market, may slash purchase tax on many vehicles in a bid to juice sales.

In Frankfurt, German giant Volkswagen jumped 5.5 percent, while high-end carmaker BMW added 3.9 percent and Mercedes-Benz maker Daimler climbed 4.9 percent.

In Milan, Italy’s Fiat rose 3.6 percent, while in Paris, Peugeot maker PSA climbed 4.2 percent and Renault added 3.4 percent

In the US, Ford shares shot up 5.8 percent and GM rose 4.6 percent.

Shares in Asia-focused bank HSBC surged 5.3 percent after the London-headquartered lender posted bumper quarterly profits.

On Wall Street, the major indices moved higher at the opening bell, with the Dow rising 1.0 percent.

But shares in IBM fell 3.3 percent after the firm announced  the acquisition of cloud computing firm Red Hat for a staggering $34 billion in cash. S&P Global Ratings on Monday cut the grade for IBM by one notch, saying the transaction would increase IBM’s debt level.

– Key figures around 1330 GMT –

New York – Dow: UP 1.0 percent at 24,927.83 points

London – FTSE 100: UP 1.9 percent at 7,073.91

Frankfurt – DAX 30: UP 2.0 percent at 11,420.61

Paris – CAC 40: UP 1.1 percent at 5,091.35

Milan – FTSE MIB: UP 2.4 percent at 19,132.19

EURO STOXX 50: UP 1.3 percent at 3,175.77

Tokyo – Nikkei 225: DOWN 0.2 percent at 21,149.80 (close)

Hong Kong – Hang Seng: UP 0.4 percent at 24,812.04 (close)

Shanghai – Composite: DOWN 2.2 percent at 2,542.10 (close)

Euro/dollar: DOWN at $1.1377 from $1.1400 at 2100 GMT Friday

Pound/dollar: UP at $1.2820 from $1.2800

Dollar/yen: UP at 112.43 from 111.83 yen

Oil – Brent Crude: DOWN 37 cents at $77.25 per barrel

Oil – West Texas Intermediate: DOWN 34 cents at $67.25 per barrel

Copyright AFP (Agence France-Press), 2018

Post Views: 20

Source: Brecorder

Related Articles

Stay Connected

- Advertisement -

Latest Articles

Popular Articles