European stock markets extended gains Tuesday in spite of Asian losses as investors assessed the outlook for international rates of interest, dealers stated.
Equities rebounded Monday from recently’s heavy selloff on relieving United States money market rates, fading inflation worries plus development on coronavirus vaccine rollouts and the passage of President Joe Biden’s $1.9-trillion stimulus package.
” European markets are trading more cautiously,” noted analyst Michael Hewson at trading company CMC Markets UK.
Investors were mulling the United States Federal Reserve’s “uncertainty on the recent sharp increase in United States bond yields”, he included.
The increase in yields on government bonds in the US and other essential economies last week sparked a market disaster which was exacerbated by profit-taking.
Greater yields had actually prompted fret about a sudden shift in financial policy towards higher interest rates.
Nevertheless, a stabilisation in the bond market on Friday and Monday appears to have staunched the bleeding in the meantime and experts said concerns over a rise in inflation and rate hikes have actually been overdone.
News Tuesday of steady eurozone inflation sent out the European single currency briefly listed below $1.20 for the first time in three weeks as it too dampened speculation about higher rate of interest.
The Eurostat company said inflation in the 19 countries that utilize the euro performed at 0.9 percent last month, the same as in January.
In Asia Tuesday, equities sank after a leading Chinese regulator raised concerns that bubbles were forming in the monetary markets.
United States and European markets were not reflective of their underlying economies and would face corrections “eventually”, stated China Banking and Insurance Regulatory Commission chairman and central bank member Guo Shuqing.
Guo’s remarks followed a number of observers cautioned equities were due a retreat following a year-long advance from their March 2020 nadir.
” Asia markets have slipped back today after Chinese regulators warned on the prospect of possession bubbles in abroad markets,” added Hewson.
” This is hardly a new phenomenon; there’s been speak about bubbles in United States markets for months and China’s property market isn’t unsusceptible to these sorts of issues either.”
In products, oil costs stabilised ahead of an essential OPEC+ manufacturer conference later this week.
The rollout of vaccines worldwide, slowing infection rates and the possibility of more US stimulus continues to support markets, though inflation concerns continue AFP/ Aizar RALDES
In Washington, the Senate is due to dispute Biden’s financial rescue bundle after it passed the House at the weekend.
London – FTSE 100: UP 0.4 percent at 6,616.77 points
Frankfurt – DAX 30: UP 0.5 percent at 14,083.58
Paris – CAC 40: UP 0.5 percent at 5,819.70
EURO STOXX 50: UP 0.4 percent at 3,721.24
Tokyo – Nikkei 225: DOWN 0.9 percent at 29,408.17 (close).
Hong Kong – Hang Seng: DOWN 1.2 percent at 29,095.86 (close).
Shanghai – Composite: DOWN 1.2 at 3,508.59 (close).
New York – Dow: UP 2.0 percent at 31,535.51 (close Monday).
Euro/dollar: DOWN at $1.2030 from $1.2049 at 2200 GMT.
Pound/dollar: UP at $1.3927 from $1.3925.
Euro/pound: DOWN at 86.38 pence from 86.53 cent.
Dollar/yen: UP at 106.92 yen from 106.76 yen.
Brent North Sea crude: DOWN 0.2 percent at $63.57 per barrel.
West Texas Intermediate: FLAT at $60.65 per barrel