LONDON: Major stock markets made solid gains and the dollar firmed Tuesday after more tech-driven record highs on Wall Street and as investors awaited fresh US economic data for a better handle on the outlook for inflation.
Traders are keeping an eye also on developments in France, with fears growing that a snap legislative election called by President Emmanuel Macron could see the far right succeed and cause political turmoil in the European Union.
The French situation has helped the London Stock Exchange reclaim from Paris the title of Europe’s biggest stock market by valuation.
The mood on trading floors was generally upbeat after the S&P 500 and Nasdaq chalked more record closes Monday thanks to continued buying of tech titans including Apple, Intel and Microsoft owing to optimism over artificial intelligence.
European stock markets rebound as focus switches to US
Analysts were confident markets were well placed for more gains owing to expected cuts to US interest rates and strong earnings.
“The S&P 500 hit its 30th record high of the year on Monday and this is driving enthusiasm towards European and Asian shares,” noted Kathleen Brooks, research director at XTB trading group.
Asian investors extended the buying, with Tokyo and Taipei closing up more than one percent, while there were also healthy gains in Shanghai, Sydney, Singapore, Mumbai, Bangkok, Seoul and Wellington.
However, Hong Kong reversed early gains to fall into the red.
In Europe, Frankfurt and Paris extended Monday’s advance after last week’s sell-off fuelled by the uncertainty in Europe. London was also higher around the half-way stage.
Investors brushed aside data Tuesday showing German investor confidence rose less than expected in June after Europe’s top economy saw an uptick in inflation following months of decline.
The ZEW institute’s closely-watched economic expectations index edged up to 47.5 points, from 47.1 points in May.
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