Receive free Markets updates
We’ll send you a myFT Daily Digest email every morning with the latest market news.
Wall Street shares rose on Tuesday, fueled by a rally in major tech stocks, while the prospect of more rate hikes weighed on markets in Europe.
The tech-heavy Nasdaq Composite was up 1.1 percent by early afternoon in New York, recovering from two straight days of declines. The benchmark S&P 500 gained 0.8 percent.
The indices were boosted by gains in big tech stocks, with heavyweights Tesla and Nvidia each up 1.7 percent, while Amazon was up 1.3 percent. The NYSE Fang+ Index, which tracks some of the largest technology companies, rose 1.2 percent.
The steps were similar to those in Europe. The regional Stoxx 600 ended the day flat but was helped by a 0.2 percent gain for the technology index Stoxx 600. France’s Cac 40 rose 0.4 percent.
“The outperformance of the technology sector reflects the market’s continued interest in AI and machine learning opportunities, which appear to be overshadowing worries about a weakening growth outlook,” said Francesco Pesole, strategist at ING.
The moves came as traders received fresh signals that the European Central Bank was poised to hike interest rates again this year to fight inflation. Christine Lagarde, President of the ECB, said her job was not over and hinted that there would be another rate hike in the euro zone in July. The ECB raised its deposit rate by a quarter point in June to 3.5 percent, the highest level in 22 years.
Inflation figures for the euro zone due out on Friday are expected to show that year-to-date price growth slowed to 5.6 percent through June, compared with 6.1 percent in the previous month, according to economists polled by Reuters.
Yields on the two-year UK government bond, which is sensitive to interest rate changes, rose 0.11 percentage point to a 15-year high of 5.27 percent.
Oil prices fell, further interrupting a short-lived rally after the weekend’s armed mutiny in Russia raised serious questions about the prospects for President Vladimir Putin’s regime and doubts about crude oil production at one of the world’s top suppliers.
International benchmark Brent crude traded 2 percent lower at $72.72 a barrel, while US West Texas Intermediate crude was down 1.9 percent at $68.04.
In China, stock markets rose, with Hong Kong’s Hang Seng Index up 1.9 percent and China’s CSI 300 up 0.9 percent.
Investors welcomed assurances that China’s officials wanted to support growth in the world’s second-largest economy, which has struggled to pick up steam since it reopened after the pandemic this year.
China’s Premier Li Qiang delivered a speech at the World Economic Forum’s annual meeting of new champions, known as “Summer Davos,” outlining Beijing’s intentions to take more effective measures to boost domestic demand.
Policymakers cut interest rates this month to boost growth. However, economists expect a number of further support measures in the coming months.
Comments are closed.