LONDON: Stocks mostly pushed higher on Tuesday, boosted by encouraging data and earnings suggesting inflation may be slowing, and resilience in the US economy.
Moves by China to shore up its economy also boosted sentiment, while the dollar continued to fall back following indications of a possible slowdown in the hiking of US interest rates.
Stocks have taken a beating in recent months as the US Federal Reserve and other central banks have aggressively hiked interest rates, and on statements by policymakers who say they are ready to push economies into recession if necessary to bring inflation down.
But stocks rallied last week as data suggested that US inflation may be moderating and policymakers have indicated that the pace of interest rate hikes may slow even if interest rates need to rise further.
Data released Tuesday suggested US inflation may be slowing.
Manufacturing prices rose just 0.2 percent month-on-month in October, and were flat when volatile food and energy prices are excluded.
“The key takeaway from the report is the clear signs of disinflation embedded in it,” said Patrick O’Hare at Briefing.com.
The data “will feed the market’s newfound belief that the Fed is apt to take a less aggressive rate-hike approach and ultimately settle on a lower terminal rate than previously thought,” he added.
Wall Street stocks snapped higher at the open of trading in New York, with the Dow rising 0.9 percent.
The broader S&P 500 jumped 1.6 percent and the tech-heavy Nasdaq soared 2.4 percent.
A key US manufacturing survey released on Tuesday turned positive when analysts had expected it to continue pointing to a contraction, suggesting resilience in the economy despite the Fed interest rate hikes.
Meanwhile, top retailer Walmart, a bellwether for shifts in consumer activity, also posted better-than-expected third quarter results with rising sales volumes and increased earnings.
A $20 billion share buyback helped send its shares rocketing 6.2 percent higher.
European stocks were mostly higher in afternoon trading, with an improvement in German investor sentiment helping eurozone stocks, while London’s blue-chip FTSE 100 index was penalised by the strong pound.
China’s move to ease some of its strict Covid-19 restrictions and provide much-needed support to its beleaguered property sector helped support sentiment in Asian trading.
Hong Kong rose more than four percent and Shanghai also closed in positive territory.
Optimism for a thawing in relations between Washington and Beijing was boosted after Biden and Xi’s extended talks on the sidelines of the G20 summit in Indonesia.
While there remain differences on hot-potato issues such as Taiwan, the two did find common ground on the Ukraine conflict, climate and the need to avoid another Cold War.
Oil prices slid as the International Energy Agency once again cut its demand growth forecasts given the fragile state of the global economy.
– Key figures around 1330 GMT –
London – FTSE 100: DOWN 0.3 percent at 7,366.09 points
Frankfurt – DAX: UP 0.4 percent at 14,367.91
Paris – CAC 40: UP 0.6 percent at 6,646.55
EURO STOXX 50: UP 0.7 percent at 3,913.49
New York – Dow: UP 0.9 percent at 33,821.25
Tokyo – Nikkei 225: UP 0.1 percent at 27,990.17 (close)
Hong Kong – Hang Seng Index: UP 4.1 percent at 18,343.12 (close)
Shanghai – Composite: UP 1.6 percent at 3,134.08 (close)
Euro/dollar: UP at $1.0422 from $1.0331 on Monday
Pound/dollar: UP at $1.1962 from $1.1751
Dollar/yen: DOWN at 138.85 yen from 139.90 yen
Euro/pound: DOWN at 87.17 pence from 87.89 pence
West Texas Intermediate: DOWN 0.9 percent at $85.10 per barrel
Brent North Sea crude: DOWN 0.9 percent at $92.33 per barrel