Stocks Rise, Buoyed by China Tech; Dollar Drops: Markets Wrap

European stocks followed Asian shares higher, heading for the best weekly advance since mid-March. The dollar dropped.

Miners led gains in Europe’s Stoxx 600, while utilities fell. Shares of UK energy providers extended this week’s losses after the government announced windfall tax plans to parliament on Thursday, and BP Plc said it will look again at its plans in the country. Oil fluctuated.

Stocks in Asia were buoyed by better-than-expected earnings at Chinese technology companies. Alibaba Group Holding Ltd. and Baidu Inc. beat sales forecasts. US futures wavered after shares climbed on Wall Street on signs consumers remain resilient despite inflationary pressures. 

The dollar extended a slide, with a gauge of the currency versus major peers down almost 3% from a May 12 peak. Treasury yields were steady. 

Global stocks look set to snap seven weeks of declines that made valuations attractive and enticed investors back into a market still shadowed by worries about inflation and higher interest rates, China’s downbeat economic outlook and the war in Ukraine.

Equities saw the largest amount of inflows in 10 weeks as the “summer rally bandwagon” grows, Bank of America strategists said, citing EPFR Global data. Citigroup Inc. strategists now recommend buying European shares on their appealing valuations compared to the US.

“We may see a little bit more stability here because we have repriced the stocks so much already,” Anastasia Amoroso, iCapital chief investment strategist, said on Bloomberg Television. “In the next three to six months it’s still going to be a constrained market environment.”

In corporate news, state-owned automaker China FAW Group Co. is considering acquiring a significant stake in the troubled ride-hailing giant Didi Global Inc., according to people familiar with the matter. 

Other people said a consortium backed by the billionaire Issa brothers is considering dropping out of the bidding for Walgreens Boots Alliance Inc.’s international arm due to disagreements over price. 

Meanwhile, China-US tensions are once again being played out after direct comments from Secretary of State Antony Blinken aimed at Chinese President Xi Jinping. And in a fresh challenge to Beijing, the US and Taiwan are planning to announce negotiations to deepen economic ties.

Approaching day 100 of Russia’s war in Ukraine, the US may announce a new package of aid for Kyiv as soon as next week that would include long-range rocket systems and other advanced weapons. 

Russia’s efforts to avoid its first foreign default in a century are back in focus on Friday, when investors are supposed to receive about $100 million in interest on Russian debt. 

• US core PCE price index; personal income and spending; wholesale inventories; University of Michigan consumer sentiment Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.3% as of 9 a.m. London time
• Futures on the S&P 500 were little changed
• Futures on the Nasdaq 100 fell 0.2%
• Futures on the Dow Jones Industrial Average were little changed
• The MSCI Asia Pacific Index was little changed
• The MSCI Emerging Markets Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro rose 0.1% to $1.0736
• The Japanese yen was little changed at 127.11 per dollar
• The offshore yuan rose 0.2% to 6.7520 per dollar
• The British pound rose 0.2% to $1.2621

Bonds

• The yield on 10-year Treasuries was little changed at 2.75%
• Germany’s 10-year yield declined two basis points to 0.98%
• Britain’s 10-year yield declined two basis points to 1.95%

Commodities

• Brent crude rose 0.2% to $117.62 a barrel
• Spot gold rose 0.4% to $1,858.76 an ounce

Source By: bloomberg