LONDON, – Global shares rose on Wednesday, fuelled by positive tech earnings and optimism Chinese authorities will offer support to its stock markets, while the euro rose after surveys suggested a brightening manufacturing outlook.
European stocks , opens new tab climbed 0.9%, on course for their best day since Dec. 1, with tech stocks. opens new tab adding over 3.6% to their highest in two years.
Dutch chipmaking kit manufacturer ASML Holding , opens new tab rose nearly 6% after beating fourth-quarter earnings estimates and posting its best quarterly
Investors also focused on European manufacturing purchasing managers’ index (PMI) figures that depicted a tough start to 2024 for euro zone businesses as activity contracted again in January, although the outlook did improve somewhat.
Germany and France, the 20-country currency union’s biggest economies, both saw an improvement in their manufacturing PMIs but a deterioration in their services indexes.
The euro rose after the surveys and was last up 0.4% at $1.0897.
The European Central Bank (ECB) meets on Thursday and is widely expected to keep rates unchanged – though traders are pricing in as much as 130 basis points of interest rate cuts this year.
“There’s an awful lot of optimism out there – positive momentum from the finish in the U.S. last night,” said Michael Hewson, chief markets analyst at CMC Markets.
“But it’s hard to escape the fact that we are very much in a range when it comes to UK and European markets,” he added, with U.S. stocks performing better as the economy there stages a more robust recovery.
Wall Street was set to gain, with e-mini futures for the S&P 500 up 0.4% as investors focused on a slew of earnings.
On Tuesday, Netflix , opens new tab rallied 8% in extended trading after the video streaming service handily beat subscriber estimates in the fourth quarter.
The MSCI world equity index , opens new tab, which tracks shares in 47 countries, gained 0.4%.
The MSCI’s broadest index of Asia-Pacific shares outside Japan, opens new tab gained 1.2%. Still, the index is down almost 5% so far this month.
Investors in Asia have focused on Chinese stocks after a wretched start to the year.
Chinese authorities were preparing a package of measures worth $278 billion to stabilise the slumping stock market offered some hope markets may steady, though investors remained sceptical and unimpressed, Bloomberg reported on Tuesday.
“I suspect policymakers would prefer markets to be more stable, but I doubt they plan to make huge unconditional injections into markets,” said Ben Bennett, APAC investment strategist for Legal and General Investment Management.
China blue-chips , opens new tab added 1.4%, but hovered near five-year lows they have been trading at for the past week, while Japan’s Nikkei, opens new tab closed 0.8% lower.
The dollar index , which measures the U.S. currency against six rivals, fell 0.4% and was last at 103.13.
Nevertheless, the index is up about 1.7% this month, on course for its strongest monthly performance since September as traders walk back their expectations of early and steep Fed interest rate cuts.
The spotlight is set to switch to personal consumption expenditure data, the Fed’s preferred inflation gauge, as well as the PMI readings, to assess the outlook for interest rates.
The Japanese yen, meanwhile, strengthened as investors firmed up bets that the Bank of Japan will exit stimulus in coming months.
It gained as much as 0.4% to 147.76 per dollar and Japanese government bond yields leapt to six-week highs after the BOJ on Tuesday maintained its ultra-easy monetary settings but signalled conditions for phasing out its huge stimulus were falling into place.
The yield on 10-year U.S. Treasury notes was last at 4.103%, while the two-year Treasury yield, which typically moves in step with interest rate expectations, was at 4.316%.
Markets are now pricing in a 47% chance of a rate cut in March from the Fed, according to the CME FedWatch tool, compared to the 88% chance of a rate cut priced in a month earlier.