Let’s start the analysis with the European stock markets:
ASML Nears Record Following Results STOXX 600 Q2 Profit Up 115%, SAP Slumps Despite Forecast
By Sruthi Shankar
July 21 (.) – A string of upbeat updates from top-tier European companies helped the region’s benchmark index rise on Wednesday and rebound from Monday’s heavy losses, while travel stocks rebounded. after weeks of declines.
The pan-European STOXX 600 Index rose 1.4%, building on small gains on Tuesday. Stocks in the travel and leisure sector rose 4.2%, having recently been hurt by concerns about a resurgence of virus cases.
The Dutch semiconductor equipment maker rose 3.6% to close to the all-time highs reached last week, after raising its sales outlook for 2021 and announcing a new share buyback plan.
Shares of their peers ASMI and BE Semiconductor rose 3% each.
Swiss drugmaker Novartis added 1.8% as its second-quarter core net income exceeded market expectations, driven by its major drug brands.
European companies listed on the STOXX 600 are expected to post a 115.2% increase in second-quarter profits compared to a year ago, according to Refinitiv IBES data. Although earnings growth forecasts have risen steadily, many expect the growth rate to peak in the second quarter.
However, the upbeat reports helped investors sideline concerns about cooling global growth, as many parts of Asia, Europe and the United States face a surge in Delta variant cases.
“The sharp increase in virus cases remains a real and present danger, especially for those countries where vaccination levels are well below 50%,” said Michael Hewson, chief market analyst at CMC Markets.
“In the case of countries like the United Kingdom and the United States, where vaccination levels are much higher, the markets are betting that the wall of vaccines contains enough virus so as not to saturate the respective health systems of both countries” .
Investors expect the European Central Bank to maintain a dovish tone at its meeting on Thursday. Earlier this month, it had unveiled a new strategy in which it will tolerate higher inflation, with an inflation target of 2%.
Among the bears, German business software group SAP fell 1.9% despite raising its outlook for the second time this year.
Mercedes-Benz maker Daimler AG fell 0.9% after warning that a global shortage of semiconductor chips will depress car sales in the second half of 2021.
(Information from Sruthi Shankar in Bengaluru; Edited by Arun Koyyur) Translate serenitymarkets
Let’s now look at global markets
Delta Variant Spread Threatens Economic Recovery European Stocks Open Clearly Ahead of ECB Meeting Nikkei Up 0.6% Ahead of Olympics Weekend US Yields and Dollar Rise; gold goes down
By Andrew Galbraith and Lawrence White
SHANGHAI / LONDON, July 21 (.) – The dollar approached its high for the year and bonds continued to rise on Wednesday as the rapid spread of the Delta coronavirus variant displaced inflation as the main concern of investors and He made them run for safe haven assets.
European stocks also rose ahead of Thursday’s European Central Bank meeting, which is expected to be subdued, and the benchmark STOXX index of the 600 largest stocks in the region rose 1.3%.
Last week, data showing a rise in consumer prices in the United States in June had raised fears that the Federal Reserve could end emergency stimulus measures more quickly.
The shift from a debate over whether the price rises are transitory to outright fear of the impact of the latest COVID-19 spike had seen the US 10-year bond yield drop more than 20 basis points by within a week, as investors have opted for safe-haven assets.
The S&P 500 tumbled nearly 4% from Wednesday’s highs to Monday’s lows before rebounding.
The more positive mood for European stocks on Wednesday contrasted with a 0.13% drop in the broader MSCI index of Asia-Pacific stocks outside of Japan, as South Korea posted a daily record of new infections.
Seoul’s KOSPI fell 0.52% and Hong Kong’s Hang Seng Index fell 0.4%.
Japan’s Nikkei rose 0.6%, having hit six-month lows a day earlier, as investors bought cyclical stocks ahead of the long weekend that will mark the start of the Tokyo 2020 Olympics and because the rise in Exports in June boosted hopes for an export-led economic recovery.
Top-notch Chinese stocks were also up 0.68%.
“The level of volumes, the level of sporadic price action, I think it indicates that there is not much conviction one way or the other,” said Kay Van-Petersen, global macro strategist at Saxo Capital Markets in Singapore.
However, while he said that the peak of global growth is likely to have passed, central bank policies continue to provide strong support to global asset prices, even as they begin to mark the reduction in asset purchases.
“The balance sheets of the central banks of the G4 have increased by 15% since 2008. And my point is that this is not going to stop. It is not going to close.
US Treasury yields fell below the previous day’s close, at 1.209%, after earlier gains on Wednesday, settling at 1.205% at 0712 GMT.
The two-year yield was 0.198%, compared to a close of 0.194%.
However, echoing concern in equity markets over rising global COVID-19 infections, the dollar remained near three-month highs on Wednesday.
“Although part of the world shrugs off rising infections, as vaccination rates limit the severity of symptoms in new cases, few parts of the world can totally ignore this situation,” said Rob Carnell. , chief economist for Asia-Pacific at ING.
The dollar index was last up 0.2% to 93.161, and the euro was down 0.2% to $ 1.1755. The dollar appreciated 0.05% against the yen, at 109.89.
Oil prices resumed their decline after Tuesday’s rebound, as an industry report showed an unexpected build-up of oil inventories in the United States.
US West Texas Intermediate crude fell 0.42% to $ 66.93 per barrel, and Brent traded at $ 69.07 per barrel, down 0.4% on the day.
Spot gold rose slightly to $ 1,810.4 an ounce as yields in the United States fell from previous highs.
(Reporting by Andrew Galbraith and Lawrence White; Editing by Christopher Cushing, Kim Coghill and Catherine Evans For the . Live Markets blog on UK and European stock markets, click 🙂 Translate serenitymarkets