LONDON, UK – Oil slid but most world stock markets rose on Tuesday in anticipation of a raft of strong US corporate earnings, even as economic and geopolitical fears still dog sentiment ahead of this week’s eurozone interest rate decision.
Volatile US Treasury yields had affected stock trading Monday in the United States — uncertainty that transferred to the Asian trading day.
But Tuesday saw a modest turnaround with the Dow standing 0.6 percent in the green more than two hours into the session along with the tech-heavy Nasdaq and the broad-based S&P, coming off a five-month low Monday.
However, oil prices drifted down around two percent not least on concerns over where the conflict in the crude-rich Middle East is headed.
Traders were meanwhile waiting on a welter of third-quarter earnings notably in the tech sector, with Microsoft and Alphabet among those due to unload after market close.
General Motors set a positive tone with third-quarter profits topping estimates on strong sales and a limited impact from a workers’ strike launched five weeks ago.
In Europe, Frankfurt and Paris stocks both added around half of one percent before Thursday’s European Central Bank rate decision, while London edged up 0.2 percent to snap a four-day losing streak despite a survey showing shrinking private-sector business activity.
The ECB has lifted its key rates 10 times since July last year to tame surging inflation, though policymakers are expected to pause the tightening campaign this week.
The French luxury sector was a notable poor performer on the day as Kering published a 13 percent drop in sales with the group’s star brand Gucci showing sales off 14 percent.
Looking at prospective earnings, Stone X analyst Fawad Razaqzada said, “Tech giants are expected to deliver better profits” but “the bar is set high, and it wouldn’t take much to disappoint expectations”.
Apprehension and anxiety
“Trading has been very choppy at the start of the week — there’s clearly a lot of apprehension and anxiety in the markets which is keeping investors on their toes,” OANDA analyst Craig Erlam told AFP.
“This week, we have the ECB, big US tech earnings and inflation figures which may be playing a role. Events in Israel and Gaza are also a huge source of uncertainty,” he said.
Rising US bond yields have meanwhile increased worries that Federal Reserve interest rates will stay higher for longer, denting the growth outlook.
In Asia, late bargain-hunting saw Tokyo end in positive territory, as did Seoul, Taipei, Jakarta, Singapore and Sydney, but Hong Kong slid back 1.1 percent.
Bitcoin meanwhile soared to cross $35,000 for the first time since May last year.
The surge was caused by “growing exhilaration among investors regarding the potential approval of a bitcoin exchange-traded fund”, said Stephen Innes of SPI Asset Management.