LONDON, United Kingdom 18 – European equities rose Tuesday on upbeat US earnings, with sentiment also soothed after Britain shredded its controversial budget.
Asian and Europe chased Wall Street higher after Bank of America became the latest US financial heavyweight to top estimates, following JPMorgan Chase and others that logged solid numbers Friday.
“Better-than-expected US earnings reports sparked a rally on Wall Street with positive momentum reverberating across European equities,” Interactive Investor analyst Victoria Scholar told AFP.
“Risk appetite is picking up after a volatile week for markets, as corporate results look to be the main driver of price action today.”
Later on Tuesday, investors will digest results from Goldman Sachs, Johnson & Johnson, Lockheed Martin and Netflix.
Analysts remain hopeful that an upbeat third-quarter results season could give a shot in the arm to markets which have been slammed this year on fears over inflation and Federal Reserve interest rate hikes.
Frankfurt stocks jumped more than one percent on Tuesday as a key survey showed German investor confidence climbed slightly in October, but it still held at a low level.
London gains were curbed after the Bank of England poured cold water on a newspaper report that it could delay the sale of government bonds again to help maintain market stability.
A BoE spokesperson described the Financial Times story as “inaccurate”.
The British pound retreated back under $1.13, after jumping Monday above $1.14 as the UK government sensationally ripped up its controversial debt-fuelled budget.
After a volatile few weeks during which the pound hit a record low, new finance minister Jeremy Hunt sought Monday to reassure investors as he scrapped tax cuts and warned of tough spending cuts.
Monday’s move, which dealt a blow to Prime Minister Liz Truss’s authority, sent sterling up as much as two percent at one point and the cost of government borrowing tumbled, while the FTSE 100 jumped.
“Investors continue to monitor the political and economic turbulence surrounding the UK,” noted XTB analyst Walid Koudmani.
Markets in China fluctuated a day after authorities delayed the release of third-quarter economic figures, which analysts said were likely to show the weakest growth since the pandemic owing to Covid-19 lockdowns.
The decision comes as the Communist Party holds a key gathering at which President Xi Jinping is expected to be handed a third term.
