Global Stocks Rise on Tech Sector Strength
12 März 2019 - 10:47AM
Dow Jones News
By David Hodari
Stocks around the world rose on Tuesday amid continuing
technology sector gains and a wave of political optimism around
Brexit.
The Stoxx Europe 600 was up 0.1% in early trading, buoyed by an
increase for its autos sector. Renault shares climbed 2% after the
company and partners Mitsubishi Motors and Nissan Motors announced
plans to create a new joint decision-making body, as they attempt
to move on from the turmoil caused by the arrest of former Nissan
chairman and Renault chief executive Carlos Ghosn.
While the export-exposed autos sector extended its 2019 rally
amid hopes that U.S. and Chinese negotiators will soon sign a trade
deal, it remains 21% lower over the past year.
The British pound has climbed 1.6% against the U.S. dollar since
early Monday, and was up a further 0.5% on Tuesday after Prime
Minister Theresa May secured concessions over Brexit from the
European Union. The British Parliament was set to vote on her
revised deal later Tuesday. The U.K.'s FTSE 100 benchmark fell
0.5%, with the index tending to move inversely to the British
pound.
The changes to the Brexit deal clarify the U.K.'s ability to
sever economic ties with the EU in the event of an impasse in
future trade negotiations.
Still, while the concessions give Mrs. May a "fighting chance of
passing the Withdrawal Agreement... the odds still appear to be
stacked against her," said Lee Hardman, currency analyst at MUFG in
a note. A defeat would likely see the pound give up most of its
short-term gains, he said.
Upbeat trading in Europe echoed similar moves in Asia, where
several major indexes extended their early-week rallies, with
technology stocks helping power those gains. Hong Kong's Hang Seng
was up 1.4%, with sector giant Tencent Holdings up 1.8%, while the
tech-heavy Korean Kospi was up 0.9%, boosted by a 2.3% increase for
index heavyweight Samsung Electronics.
Asian tech stocks took their lead from their U.S. counterparts,
which were boosted Monday as chip maker Nvidia agreed to buy
computer-networking supplier Mellanox Technologies in a deal valued
at $6.9 billion. Nvidia jumped 7% on the day, rising a further 0.5%
in after-hours trading, while Nasdaq-listed Mellanox added 0.2% to
its 7.8% increase after the market close.
Ratings upgrades for Apple and Facebook allowed two of the
U.S.'s largest tech companies to further fuel the sector's
rise.
Those increases helped U.S. indexes snap five-day losing
streaks, with U.S. futures putting stocks on course for a second
straight day of gains. The S&P 500, the Dow Jones Industrial
Average, and the Nasdaq-100 were all on course to advance 0.2% at
the opening bell.
While the flow of corporate earnings releases has begun to ebb,
investors were awaiting results from Dick's Sporting Good before
the market open, with U.S. inflation data also in focus.
Nonfarm payroll figures released Friday significantly undershot
market expectations and fueled fears that the global economy is
slowing, arriving against a backdrop of weak numbers out of Europe
and Asia. Monday's retail sales figures, which showed a rise in
consumer spending in January, served to ease those concerns
though.
Bets on rising inflation having slumped in recent weeks, and
some strategists were skeptical that the U.S. economy will be able
to strengthen.
"We don't see inflation in the system," said Manish Kabra, head
of European equity quantitative strategy at Bank of America Merrill
Lynch. Still that could benefit U.S. stocks, Mr. Kabra said, with
tame inflation often supporting U.S. equities prices.
The WSJ Dollar Index, which measures the U.S. currency against a
basket of 16 others, was last down 0.1%. The yield on U.S. 10-year
Treasurys rose to 2.667%, from 2.643% on Monday.
In commodities, Brent crude oil futures were up 0.5% at $66.89 a
barrel, while copper futures were up 1% at $6,485 a metric ton,
with traders citing optimism in broader markets and the falling
dollar.
Write to David Hodari at David.Hodari@wsj.com
(END) Dow Jones Newswires
March 12, 2019 05:32 ET (09:32 GMT)
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