NEW YORK: Global stocks recovered Thursday, following the previous day’s hammering on global trade war worries as investors looked ahead to what is expected to be a strong corporate earnings season.
Bourses in London, Paris and France all registered solid gains, while Wall Street stayed in the green the entire session. The Nasdaq surged 1.4 percent higher to a record.
Analysts have projected US companies will report about a 20 percent jump in second-quarter earnings compared with the year-ago period based on solid US economic trends and tax cuts.
Optimism over earnings was the most tangible reason for the reversal in sentiment from Wednesday, when investors fretted after President Donald Trump’s administration announced plans to impose a further $200 billion of Chinese goods.
Analysts still hope the worst outcome can be avoided from the US-China trade clash and other trade disputes sparked by the US leader.
“Many agree that tariffs will ultimately be bad for the global economy, and therefore markets, but there still seems to be some hope that common sense will prevail and a full blown trade war will be averted,” noted Craig Erlam, senior market analyst at Oanda trading group.
Asian markets firmed earlier, with Japan’s Nikkei given an extra nudge by a weaker yen, which helps the country’s exporters.
Despite the currency’s popularity as a haven investment, the yen is at a six-month low against the dollar, which is winning support from a robust US economy.
Some analysts believe the US, with the stronger economy, is in a much better position to fight a trade war with China, which is battling slowing growth and a crippling debt mountain among other things. That outcome could boost the greenback, according to this view.
“Even though concerns remain over US-China trade frictions, the dollar remains stronger (against the yen) as traders believe there will be a political settlement at some point to avoid an all-out trade war,” FX Prime trader Marito Ueda told AFP.
Among individual companies, shares in Chinese telecoms equipment maker ZTE cruised 25 percent higher as the company moved a step closer to having US sanctions lifted by signing an agreement to put $400 million in escrow to cover any future violations.
The move comes after it agreed to pay a $1 billion fine and make the escrow placement in return for the lifting of a seven-year ban on US firms selling to it, which had put it on the edge of collapse.
Back in Europe, shares in Norwegian surged after the low-cost airline surprised markets with a profit in the second quarter amid expectations of a sizeable loss.
US carrier Delta Air Lines shares advanced 1.8 percent after reporting better-than-expected earnings, even as its full-year forecast missed expectations due to the hit from higher fuel prices.
New York – Dow: UP 0.9 percent at 24,924.89 (close)
New York – S&P 500: UP 0.9 percent at 2,798.29 (close)
New York – Nasdaq: UP 1.4 percent at 7,823.92 (close)
London – FTSE 100: UP 0.8 percent at 7,651.33 (close)
Frankfurt – DAX 30: UP 0.6 percent at 12,492.97 (close)
Paris – CAC 40: UP 1.0 percent at 5,405.90 (close)
EURO STOXX 50: UP 0.7 percent at 3,445.70 (close)
Tokyo – Nikkei 225: UP 1.2 percent at 22,187.96 (close)
Hong Kong – Hang Seng: UP 0.6 percent at 28,480.83 (close)
Shanghai – Composite: UP 2.2 percent at 2,837.66 (close)
Euro/dollar: DOWN at $1.1671 from $1.1674 at 2100 GMT
Pound/dollar: UP at $1.3207 from $1.3205
Dollar/yen: UP at 112.53 yen from 112.01 yen
Oil – Brent Crude: up $1.05 at $74.45 per barrel
Oil – West Texas Intermediate: DOWN 5 cents at $70.33 per barrel
Source: Brecorder
