Equity markets mostly rose Tuesday following the previous day’s sell-off, with focus on the release of US inflation data that could play a key role in the Federal Reserve’s decision-making on cutting interest rates.
The broadly upbeat performance in Asia and Europe came despite a tepid showing Monday on Wall Street, and with analysts warning the recent rally across equities could stall as investors lock in profits and assess the outlook for monetary policy.
London led the way in Europe, rising more than one percent approaching midday, as official British unemployment and wages data boosted hopes of a cut to UK interest rates in the coming months.
There was nervousness on trading floors, meanwhile, ahead of the US consumer price index report for February.
The data due Tuesday follows a surprise uptick to US inflation in January that dented hopes that the Fed would begin cutting rates sooner rather than later.
Futures traders are now betting on three reductions this year, compared with the six forecast at the start of the year.
“It is imperative to avoid a repeat of the last CPI release,” said SPI Asset Management’s Stephen Innes.
“Another report similar to January’s could raise doubts about the Fed’s rate cut wisdom in 2024.”
Hong Kong shares continued their recent advances, climbing more than three percent, helped by fresh buying of tech firms.
Electronics giant Xiaomi surged more than 10 percent after saying it would start deliveries of its first electric vehicle by the end of this month.
However, Tokyo fell again as speculation swirls that the Bank of Japan will next week shift away from its ultra-loose monetary policy.
The prospect of such action, contrary to other central banks who are looking to cut rates, is helping to strengthen the yen.
The dollar was mixed before the inflation data.
While Wall Street turned negative Monday, it follows several recent record highs for its main indices, thanks to strong company earnings amid slowing inflation.
The prospect of US interest rates coming down this year has played a role in pushing bitcoin to new record highs, with the cryptocurrency peaking at $72,880 on Monday.
Gold, seen as a haven investment, has also raced to all-time peaks in recent sessions.
– Key figures around 1145 GMT –
London – FTSE 100: UP 1.1 percent at 7,754.67 points
Paris – CAC 40: UP 0.1 percent at 8,023.46
Frankfurt – DAX: UP 0.4 percent at 17,816.95
EURO STOXX 50: UP 0.2 percent at 4,939.19
Tokyo – Nikkei 225: DOWN 0.1 percent at 38,797.51 (close)
Hong Kong – Hang Seng Index: UP 3.1 percent at 17,093.50 (close)
Shanghai – Composite: DOWN 0.4 percent at 3,055.94 (close)
New York – Dow: UP 0.1 percent at 38,769.66 (close)
Dollar/yen: UP at 147.43 yen from 146.96 yen on Monday
Euro/dollar: UP at $1.0935 from $1.0929
Pound/dollar: DOWN at $1.2793 from $1.2812
Euro/pound: UP at 85.48 pence from 85.28 pence
Brent North Sea Crude: UP 0.1 percent at $82.24 per barrel
West Texas Intermediate: UP 0.2 percent at $77.64 per barrel
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