US and European shares climb, but in China they close near a one-year low
New York — US and European shares climbed on Tuesday, lifted by data, corporate results and a return to riskier investments, while many Asian equity markets were weighed down by China amid mixed economic reports and lingering trade fears.
Strong US earnings from Netflix, Goldman Sachs and healthcare companies boosted stock prices on Wall Street and optimism about what is expected to be the strongest earnings season in seven years.
Companies on the benchmark S&P 500 stock index are expected to report an 18.6% jump in first-quarter profit on average, according to Thomson Reuters data.
The Dow Jones Industrial Average rose 255.24 points, or 1.04%, to 24,828.28, the S&P 500 gained 28.48 points, or 1.06%, to 2,706.32 and the Nasdaq Composite added 115.92 points, or 1.62%, to 7,272.20.
MSCI’s gauge of stocks across the globe gained 0.74%. European shares advanced, with the pan-European FTSEurofirst 300 index rising 0.91% and poised to close higher.
Germany’s DAX 30 index was last up 1.58%, despite fears of a trade war with the US and the current tension in Syria pushing German investor morale to its lowest level in more than five years in April. "[German data] has been a solid leading indicator in the past to a downturn," said Saxo Bank’s head of FX strategy John Hardy.
In China, stocks in Shanghai closed near a one-year low, after a US move to ban American companies from selling components to Chinese telecom equipment maker ZTE hurt tech stocks. Beijing then said it would slap a hefty temporary tariff on US sorghum imports, which sent grain futures prices jumping.
Also weighing on the region was data showing March industrial output in China missed expectations and first-quarter, fixed-asset investment growth slowed. However, China’s economy grew 6.8% in the first quarter of 2018 from a year earlier, unchanged from the previous quarter.
The country’s March retail sales also jumped more than 10%, the strongest pace in four months.
MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.36% lower, while Japan’s Nikkei rose 0.06%. The euro fell slightly after rising above $1.24 to a three-week high on the Chinese data, ebbing Syria retaliation fears, and overall renewed risk sentiment.
"There’s been a general weakness in the dollar and risk sentiment seems to be reviving somewhat. That is supporting the euro but also sterling and Asian currencies," said Alvin Tan, FX strategist at Société Générale.
The dollar index rose 0.19%, with the euro down 0.25% to $1.2347. Sterling was last at $1.4304, down 0.22% on the day, after hitting nearly $1.438, its highest since British voters decided in June 2016 to exit the EU.
US sanctions on major Russian producer Rusal drove aluminium prices to almost $2,500 a tonne, their highest since mid 2011, before profit-taking reversed it all. Rusal accounts for 6% to 7% of global aluminium supply.
Oil prices steadied as investors took profit on last week’s rally and amid concern over the potential for supply disruptions. US crude fell 0.32% to $66.01 a barrel and Brent was last at $71.20, down 0.31% on the day.