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European stock markets rose on Tuesday after losses in Asia as traders weighed strong earnings news against the potential impact of the Delta variant of Covid on the economic recovery
London (UrduPoint / Pakistan Point News – Aug. 3, 2021): European stock markets surged on Tuesday after losses in Asia as traders weighed strong earnings news against the potential impact of the Delta variant of Covid on the economic recovery.
Oil prices rebounded but did not add to Monday’s heavy losses as the re-imposition of lockdowns and other restrictions in several countries, including China, raised demand concerns.
The dollar fell against its main rivals on key US employment data over the week.
While corporate earnings continue to impress – BP and auto giant Stellantis posted record profits Tuesday – traders’ optimism has taken a blow after a string of sub-forecast stocks from the world’s largest economies.
London’s benchmark FTSE 100 index rose about half a percent in mid-day trades, “led by BP’s return to profitability,” noted Russ Mold, investment director at AJ Bell.
However, an increase in Covid cases in the economic powerhouse China had contributed to the worries on the stock exchanges.
“The surge in US cases and the situation (Southeast Asia) are well known, but what is terrifying the markets is China,” said Jeffrey Halley of OANDA.
“Extrapolating even more supply chain disruptions is not a big deal, especially when it is just as difficult for Chinese authorities to control as it is for officials around the world.” Hong Kong and Shanghai continue to be plagued by the uncertainty caused by China’s crackdown on the tech, tutoring and real estate sectors, raising concerns that officials will target other industries.
Gambling companies appeared next in the crosshairs after a state media commentary described online gaming as “spiritual opium”.
“Fears over Chinese regulators’ interference are not going away as Tencent is the latest stock to break down on gossip about Beijing trying to wield its power, added analyst Mold.
News that Hong Kong should ease travel restrictions, which could give the fragile economy a boost, didn’t stop the city’s Hang Seng Index from suffering another decline.
But Indian markets hit new all-time highs, fueled by hopes of recovery in Asia’s third largest economy.
The reference index Nifty 50 exceeded the mark of 16,000 points for the first time, while the Sensex reached a new record high of 53,542 points.
At the same time, long-standing fears that inflation could rise in the coming months fuel talk of central banks being forced to end their huge stimulus packages that have rallied stocks.
– Key figures around 1100 GMT – London – FTSE 100: Plus 0.4 percent to 7,106.78 points in Frankfurt – DAX 30: Plus 0.2 percent to 15,594.80 Paris – CAC 40: Plus 1.0 percent to 6,740.11 euros STOXX 50: Plus 0.2 percent to 4,123.62 Tokyo – Nikkei 225: DOWN 0.5 percent to 27,641.83 (close) Hong Kong – Hang Seng Index: DOWN 0.2 percent to 26,194.82 (close) Shanghai – Composite : DOWN 0.5 percent to 3,447.99 (close) New York – Dow: DOWN 0.3 percent to 34,838.16 (close) Euro / Dollar: Up at 1.1887 USD from 1.1874 USD around 2050 GMT Euro / Pound: Down to 85.32 pence from 85.49 pence Pound / dollar: Up to 1.3932 from 1.3885 dollar / yen: DOWN to 109.16 yen from 109.34 yenBrent North Sea crude: UP 0.4 percent at $ 73.21 a barrel West Texas Intermediate: up 0.4 percent to $ 71.57 a barrel
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