Global stocks pushed higher on Tuesday, while the dollar declined, as traders moved back into riskier assets after the worst streak of weekly losses for equities since 2008.
Wall Street’s S&P 500 index was up 1.4 per cent by the late morning in New York, even as shares in Walmart — the world’s largest bricks-and-mortar retailer — slid 11 per cent after inflationary pressures forced it to cut current-quarter earnings forecasts. The technology-heavy Nasdaq Composite added 2 per cent, after closing 1.2 per cent lower on Monday. In Europe, the Stoxx 600 index ended the session 1.2 per cent higher.
Those moves followed a 3.3 per cent ascent for Hong Kong’s Hang Seng gauge. The region’s tech-focused sub-index rose 5.8 per cent as the heads of large Chinese technology companies met regulators to discuss the country’s digital economy.
Analysts at JPMorgan suggested that equity markets had priced in too much recession risk, saying stocks “stand to recover if a recession doesn’t come through, given already substantial multiple derating, reduced positioning and downbeat sentiment”. The US bank is “sceptical” that April’s equity fund outflow — the highest since March 2020 — was the start of a long phase of outflows.
The FTSE All World index, which concluded six consecutive weeks of declines last Friday, rose 1.6 per cent on Tuesday.
Meanwhile, the dollar index — a measure of the US currency against six others — dropped 0.8 per cent, in a third day of falls, having hit multiyear highs last month. Compounding the greenback’s weakness, sterling rallied 1.3 per cent to just under $1.25, putting the pound on track for its biggest daily rise since October 2020. The euro rose by its most in more than two months, up 1.1 per cent to $1.05.
The common currency added to its gains after Dutch central bank chief Klaas Knot suggested that the European Central Bank should raise interest rates by 0.25 percentage points in July, but also remain open to…
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