World stocks near a six-month peak as China stocks rebound
New York — Equity markets around the world climbed to approach a six-month high on Tuesday, buoyed by a rebound in Chinese stocks, while corporate earnings helped push Wall Street’s benchmark S&P 500 index towards record levels.
Oil prices advanced as the US revived sanctions against major crude exporter Iran.
The rise in stock prices prompted investors to sell safe-haven investments ahead of the first piece of this week’s $78bn quarterly government refunding, sending US treasury yields higher. "It’s the bounce in stocks and other risky assets that caused an uptick in yields," said Mike Lorizio, head of US treasuries trading at Manulife Asset Management in Boston.
The Dow Jones Industrial Average rose 171.68 points, or 0.67%, to 25,673.86, the S&P 500 gained 11.49 points, or 0.40%, to 2,861.89 and the Nasdaq Composite added 20.95 points, or 0.27%, to 7,880.63.
MSCI’s gauge of stocks across the globe gained 0.61%, while the pan-European FTSEurofirst 300 index rose 0.72%. Powered by gains in tech stocks and a strong second-quarter US earnings season amid economic optimism, the S&P 500 was within reach of a record peak it hit on January 26.
Shares of Google’s parent Alphabet, Microsoft and Facebook were up between 0.3% to 0.7%.
Chinese stocks rebounded overnight on hopes of fresh government spending, following a four-day sell-off that had knocked them down about 6%. Stock markets in London, Paris and Frankfurt then rose 0.7% to 1% as Europe’s investors cheered both the move up in commodity stocks and results from Italy’s biggest bank UniCredit.
Currency markets remained volatile, although less so than in recent sessions, as the dollar dipped. The dollar weakened against the euro as the Chinese yuan showed more stability. The euro bounced to $1.16 from a near six-week low despite a second day of disappointing German economic data, while sterling recouped some ground after Brexit worries had pushed it to an 11-month low.
Sterling fell to a five-month low against the euro as the latter rebounded and investors fretted Britain could crash out of the EUn without securing a trade deal.
Turkey’s lira recovered as much as 2% from Monday’s losses of more than 5% after Washington moved to end duty-free access to US markets for some Turkish exports.
The US treasury department will sell $34bn in three-year notes at 15pm GMT in the largest three-year auction in eight years. It will sell a record amount of 10-year debt worth $26bn on Wednesday, and an all-time high of $18bn in 30-year bonds on Thursday.
Brent crude prices climbed as the US revived sanctions against Iran. US crude rose 0.65% to $69.46 a barrel and Brent was last at $74.66, up 1.23%. The first batch of US sanctions against Iran officially came into effect at 4.01am GMT on Tuesday. They target Iran’s dollar purchases, metals trading, coal, industrial software and its automotive sector.