Global stock prices rose yesterday on the back of solid second-quarter US corporate earnings which temporarily took investor attention off festering trade wars, dealers said. “Global equity bulls were lingering in the vicinity during yesterday’s trading session as investors diverted some attention from trade war concerns to focus on strong US corporate earnings,” said Lukman Otunuga, a research analyst at FXTM.
But even as market players picked up bargains following the previous day’s tepid session, gains were capped by continuing concerns about the simmering trade war between China and the US. Key European stock markets were higher at the close as shares in energy firms surged along with oil prices, which were in turn boosted by US President Donald Trump re-imposing stiff sanctions on major crude producer Iran.
In London, the FTSE 100 closed up 0.7% to 7,718.48 points; Frankfurt — DAX 30 closed up 0.4% to 12,648.19 points and Paris — CAC 40 ended up 0.8% to 5,521.31 points yesterday. “Earnings season is shaping up very well indeed, which accounts for why US equities remain comfortably ahead of the likes of Europe, but a rising tide lifts all boats and will reinforce the impression that this economic recovery and its associated bull market has further to run,” said IG analyst Chris Beauchamp.
On Wall Street approaching midday, the Dow was solidly higher while the S&P 500 index was also up, moving within reach of its all-time high of 2,872.87, hit in January. Analysts cited the strong second-quarter earnings season as a supporting factor, with S&P 500 companies so far reporting 24% higher profits compared with the year-ago period. US companies could also authorise as much as $1tn in share buybacks this year following that profit surge, according to a note from Goldman Sachs. As investors awaited the next chapter in the long-running trade tariffs dispute, they moved in to pick up cheaper stocks in Asia, too.
Hong Kong was up 1.5% as it built on Monday’s gains. Shanghai surged to close 2.7% higher, a day after hitting a near two-and-a-half-year low. Tokyo jumped 0.7% and Singapore 1.8%.
Sources and photo-credits: AFP, Gulf Times