Global Stocks Rise on Tech Sector Strength
March 12 2019 - 7:13AM
Dow Jones News
By David Hodari
Stocks around the world rose Tuesday amid continuing technology
sector gains and a wave of political optimism around Brexit.
The Stoxx Europe 600 was up 0.2% in morning trading, buoyed by
its retail and travel sectors, which each climbed 0.9%.
Renault shares climbed 1.3% after the company and partners
Mitsubishi Motors and Nissan Motors announced plans to create a new
joint decision-making body, as they attempt to move on from the
turmoil caused by the arrest of former Nissan chairman and Renault
chief executive Carlos Ghosn.
The British pound climbed 1% against the U.S. dollar Monday and
was up a further 0.2% Tuesday after Prime Minister Theresa May
secured concessions over Brexit from the European Union. The
British Parliament was set to vote on her revised deal later
Tuesday. A defeat would likely see the pound give up most of its
short-term gains, analysts said.
The U.K.'s FTSE 100 benchmark fell 0.1%, with the index tending
to move inversely to the British pound. The yield on 10-year German
government bonds, often seen as a haven asset, had last risen to
0.091% from 0.061% late Monday.
The changes to the Brexit deal clarify the U.K.'s ability to
sever economic ties with the EU in the event of an impasse in
future trade negotiations. Traders reported thinner trading volumes
in Europe, as investors paused ahead of the vote.
"The market started off hopeful, partly on follow through from
the U.S. and partly on hopes from that British news overnight,"
said Stewart Cook, head of London sales trading at Berenberg. "But
I think people are still skeptical and there's a lot of uncertainty
around."
Upbeat trading in Europe echoed similar moves in Asia, where
several major indexes extended their early-week rallies, helped by
technology stocks. Hong Kong's Hang Seng was up 1.5%, with sector
giant Tencent Holdings up 1.8%. The tech-heavy Korean Kospi was up
0.9%, boosted by a 2.3% increase in index heavyweight Samsung
Electronics.
Asian tech stocks took their lead from their U.S. counterparts,
which were boosted Monday as chip maker Nvidia agreed to buy
computer-networking supplier Mellanox Technologies in a deal valued
at $6.9 billion. Nvidia's stock jumped 7% on the day, rising a
further 0.5% in after-hours trading, while Nasdaq-listed Mellanox
added 0.2% to its 7.8% increase after the market close.
Ratings upgrades for Apple and Facebook allowed two of the
U.S.'s largest tech companies to further fuel the sector's
rise.
Those increases helped U.S. indexes snap five-day losing streaks
and U.S. futures putting stocks on course for a second day of gains
Tuesday. The S&P 500 and the Dow Jones Industrial Average were
on course to advance 0.1% at the opening bell, and the Nasdaq-100
was set to climb 0.2%.
While the flow of earnings releases has begun to ebb, investors
were awaiting results from Dick's Sporting Good before the market
open. U.S. inflation data was also in focus.
Nonfarm payroll figures released Friday significantly undershot
market expectations and fueled fears that the global economy is
slowing, arriving against a backdrop of weak numbers out of Europe
and Asia. Monday's retail sales figures, which showed a rise in
consumer spending in January, served to ease those concerns.
Bets on rising inflation having slumped in recent weeks, and
some strategists were skeptical that the U.S. economy will be able
to strengthen.
"We don't see inflation in the system," said Manish Kabra, head
of European equity quantitative strategy at Bank of America Merrill
Lynch.
Still that could benefit U.S. stocks, Mr. Kabra said, with tame
inflation often supporting equities prices.
The WSJ Dollar Index, which measures the U.S. currency against a
basket of 16 others, was last down 0.2%. The yield on U.S. 10-year
Treasurys rose to 2.664% from 2.643% Monday.
Brent crude oil futures were up 1% at $67.25 a barrel, while
copper futures were up 1.1% at $6,493.50 a metric ton, with traders
citing optimism in broader markets and the falling dollar.
Write to David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
March 12, 2019 06:58 ET (10:58 GMT)
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