Stocks rise as Treasuries stabilize


LONDON / TOKYO (Reuters) – Global stocks rose on Wednesday, with European indices echoing positive moves in Asia as a pullback in U.S. Treasury yields boosted demand for riskier assets and weakened. the dollar.

FILE PHOTO: The offices of the London Stock Exchange Group are seen in the City of London, Great Britain, on Dec. 29, 2017. REUTERS / Toby Melville / File Photo

The Euro STOXX 600 added 0.7%, with Frankfurt shares rising 0.9% to an all-time high and London FTSE adding 1.3% before the new UK budget is introduced, with measures to boost the economy.

Automakers led earnings, adding as much as 2.6% to hit their highest level since June 2018.

MSCI’s broader Asia-Pacific equity index outside of Japan rose 1.7%, led by China stocks.

E-mini S&P futures were up 0.6%.

The gains for equities came as benchmark US government yields continued to stabilize after last month’s sell-off.

The yield on 10-year Treasuries stood at 1.41%, down from last week’s one-year high of 1.61%, ahead of a slew of US economic data to be released. At the end of the week. Bond yields increase when prices fall.

Rising yields around the world, fueled by movements in Treasuries, have hit financial markets in recent weeks. Investors were betting that a strong US economic rebound amid ultra-lax monetary conditions would boost inflation.

Still, optimism that more imminent US stimulus will fuel the global economic recovery propelled stocks, with US President Joe Biden close to approving a $ 1.9 trillion spending package.

“We are caught in the middle of this crossfire between a more positive macroeconomic situation and some excesses that have been developing here and there,” said Olivier Marciot, senior portfolio manager at Unigestion.

“The market is reassessing the situation as to whether (the stock market gains) have been too high and too fast.”

Wall Street had ended lower on Tuesday, brought down by Apple and Tesla as fears of too-high valuations persisted.

The MSCI World Stock Index, which tracks stocks in 49 countries, gained 0.4%.

FROTHY PRICES?

Some analysts continued to warn that share prices may be sparkling, a fear echoed by a senior Chinese regulatory official on Tuesday, and as a result make it difficult for equity markets to hold onto gains.

Fears that the sell-off of US Treasuries will resume last week, which rocked equity markets, could also put a damper on share prices, they said.

“While markets have stabilized … the tone remains subdued as investors continue to fear further rate sell-off,” analysts at TD Securities said in a note.

Cautious mood weighed on the US dollar. In recent days, he had benefited from investors’ hopes that the United States would enjoy a faster economic recovery and that the US central bank would tolerate higher bond yields.

An index of the dollar against six of its major pairs changed little to 90.787, after retreating from a high of almost a month overnight.

The Australian dollar, which has benefited from bets on a global trade acceleration, rose 0.1% to $ 0.7820 as stronger-than-expected economic growth in the fourth quarter fueled hopes of a recovery. V shape of the coronavirus pandemic.

Oil prices rose as signs of progress in launching the COVID-19 vaccine in the United States, the world’s largest consumer, raised demand expectations.

US West Texas Intermediate crude rose 0.4% to $ 59.99 a barrel. Brent futures rose by the same amount to $ 62.96. [O/R]

Reporting by Tom Wilson in London and Stanley White in Tokyo; edited by Christopher Cushing, Christian Schmollinger, Larry King

.

Source link