European stocks rose, boosted by gains on Wall Street, as optimism over an eventual breakthrough for US debt-ceiling talks strengthened risk-taking.
(Bloomberg) — European stocks rose, boosted by gains on Wall Street, as optimism over an eventual breakthrough for US debt-ceiling talks strengthened risk-taking.
Autos, technology and energy led the advance in Europe, although BT Group Plc slumped 10% after the UK’s biggest network operator said it plans to cut its labor force by as much as 42% by the end of the decade.
A gauge of Asian stocks climbed as Japan’s Topix index set a fresh 33-year high, with rising exports and a weakening yen buoying sentiment. US equity futures were steady after the S&P 500 and Nasdaq 100 rallied more than 1% on Wednesday.
President Joe Biden expressed confidence there will be no US default, and House Speaker Kevin McCarthy said reaching an agreement this week is “doable.” JPMorgan Chase & Co. chief Jamie Dimon said the US government “probably” will not default on its debt after he and other bank leaders met in Washington to discuss the debt limit.
The calmer mood in stocks was reflected in the CBOE VIX index of equity market volatility, which fell below 17 to close at the lowest level since the start of the month. In Europe, markets in Nordic countries and Switzerland are closed for holidays Thursday.
An index of dollar strength headed for a third day of gains, while Treasuries were little changed.
The yuan fell 0.3% against the dollar in both onshore and offshore markets, extending a loss after breaching a key level on Wednesday. The People’s Bank of China set a stronger daily fix than analysts expected, signaling a desire to manage the pace of decline.
In Asian trading, tech stocks rallied in both Hong Kong and Japan, with Alibaba Group Holding Ltd. gaining 2.6% ahead of its earnings release Thursday. Chipmakers were among best performers on the Nikkei 225 after Japan Prime Minister Fumio Kishida met with global executives to boost the country’s domestic semiconductor sector.
“Japan has a huge focus on the return on equity parameter — that is helping the stock rally,” Anita Gupta, head of equity strategy for Emirates NBD, said in an interview with Bloomberg Television. “In Japan we were expecting a rebound and it happened. We think there is more to go.”
Investor attention later turns to initial US jobless claims data, which could provide clues on what the Federal Reserve intends to do next in its monetary policy tightening campaign. Earnings due from Walmart Inc. will provide insights on the state of the economy and the American consumer.
Key events this week:
- US initial jobless claims, Conference Board leading index, existing home sales, Thursday
- Japan CPI, Friday
- ECB President Christine Lagarde participates in panel at Brazil central bank conference, Friday
- New York Fed’s John Williams speaks at monetary policy research conference in Washington; Fed Chair Jerome Powell and former chair Ben Bernanke to take part in panel discussion, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 rose 0.5% as of 8:16 a.m. London time
- S&P 500 futures were little changed
- Nasdaq 100 futures were little changed
- Futures on the Dow Jones Industrial Average were little changed
- The MSCI Asia Pacific Index rose 0.8%
- The MSCI Emerging Markets Index rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro fell 0.1% to $1.0825
- The Japanese yen was little changed at 137.58 per dollar
- The offshore yuan fell 0.4% to 7.0380 per dollar
- The British pound fell 0.2% to $1.2462
Cryptocurrencies
- Bitcoin fell 0.5% to $27,203.73
- Ether fell 0.5% to $1,818
Bonds
- The yield on 10-year Treasuries advanced one basis point to 3.58%
- Germany’s 10-year yield advanced four basis points to 2.38%
- Britain’s 10-year yield advanced three basis points to 3.87%
Commodities
- Brent crude fell 0.4% to $76.66 a barrel
- Spot gold fell 0.2% to $1,977.03 an ounce
This story was produced with the assistance of Bloomberg Automation.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.