- Euro STOXX 600 up 0.3%
- UBS and financials lead more optimistic earnings
- Concerns over Chinese real estate sector still worry investors
- Stable dollar
LONDON / HONG KONG, Oct.26 (Reuters) – Stocks rose slightly globally on Tuesday, with bullish corporate earnings supporting European equities and outweighing recurring concerns over China’s real estate sector.
The wide Euro STOXX 600 (.STOXX) hit its highest level in seven weeks, adding 0.5%, with German stocks (.GDAXI) gaining 0.9%.
After a stellar quarter for US and UK banks, the Swiss UBS (UBSG.S) rose more than 2% on its highest quarterly profit since 2015, helping the financial services sector (.SXFP) to climb d ‘about 1%.
Wall Street futures rose 0.3% as earnings season peaked and tech heavyweights including Apple Inc (AAPL.O) and Alphabet (GOOGL.O) expected to report later.
Still, some analysts have warned of the impact of the COVID-19 pandemic on supply chains.
“While the results season has been good overall, we are starting to see more and more companies with backlogs, hiring difficulties and rising input prices eating away at profits.” , wrote analysts at Deutsche Bank.
The MSCI Global Equity Index (.MIWD00000PUS), which tracks stocks in 50 countries, added 0.1%
Asian stocks had previously followed Wall Street records overnight, before dropping their gains. Electric car maker Tesla Inc (TSLA.O) had boosted Wall Street after joining the $ 1,000 billion market capitalization club.
The MSCI gauge for Asia-Pacific stocks outside of Japan (.MIAPJ0000PUS) held steady after briefly hitting its six-week high, following gains throughout October.
Chinese real estate stocks weighed on the market, which extended losses as another developer, Modern Land (1107.HK), defaulted on a payment, adding to concerns over the effects of the debt crisis in the country. China Evergrande group (3333.HK). Read more
Hong Kong-listed mainland real estate companies (.HSMPI) fell 5% while the CSI 300 Continental Real Estate Index (.CSI000952) fell 2.8%.
China has announced that it will implement a pilot property tax in some areas, adding to existing concerns over real estate. Read more
Some analysts have expressed concern about the slowdown in global growth due to the slowdown in the world’s second-largest economy.
Citi strategist Robert Buckland said the bank had cut its forecast for 2022 global real GDP growth to 4.2% from 4.4%.
“The impact of the Chinese slowdown is becoming more and more evident in other Asian economies, but also in Europe where growth forecasts in Germany have been reduced from 5.2% to 3.5%,” he said. he writes, warning of “a deeper and longer Chinese slowdown”.
The US dollar index held at 93.932 – between a one-year high of 94.563 reached earlier in the month and a one-month low of 93.483 on Monday.
Analysts expect him to stay there for a series of central bank meetings in the coming days.
The European Central Bank and the Bank of Japan are both expected to hold monetary policy meetings on Thursday, but neither are expected to take significant action on interest rates. Read more
Eurozone inflation expectations among bond investors opened to a new seven-year high, exceeding the ECB’s target, leading to believe that the ECB-era stimulus pandemic was not sustainable.
Benchmark 10-year U.S. Treasuries were flat at 1.6388% from last week’s five-month high of 1.7% as uncertainty over when the Federal Reserve would raise rates for curbing the rise in inflation weighed on market sentiment.
Already approaching multi-year highs, oil prices edged up in a market plagued by tight global supply and increasing demand for fuel in the United States and beyond. Read more
Brent crude futures fell 0.4% to $ 85.68 a barrel, while US West Texas Intermediate (WTI) crude futures edged up 0.01% to 83, $ 76 per barrel.
Reporting by Tom Wilson in London and Kane Wu in Hong Kong; additional reporting by Sujata Rao in London; Editing by Sam Holmes, Simon Cameron-Moore and Timothy Heritage
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