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Stock markets mostly rise on rate cut hopes / Photo: © AFP/File
Stock markets mostly rise on rate cut hopes
Stock markets mostly advanced Tuesday as a drop in US retail sales raised hopes that the Federal Reserve would have room to cut interest rates later this year.
Traders are keeping an eye also on developments in France, with fears growing that a snap legislative election called by President Emmanuel Macron could see the far right succeed and cause political turmoil in the European Union.
The French situation has helped the London Stock Exchange reclaim from Paris the title of Europe's biggest stock market by valuation.
The mood on trading floors was generally upbeat after the S&P 500 and Nasdaq chalked more record closes Monday thanks to continued buying of tech titans including Apple, Intel and Microsoft owing to optimism over artificial intelligence.
The Dow and the broad-based S&P 500 extended gains after the open on Tuesday but the tech-heavy Nasdaq fell.
The dollar also fell against the euro and the pound.
US retail sales came in below expectations for a second straight month in May as gas station revenues fell sharply, according to official data.
The report suggests consumers are spending less than expected, a good sign for the Federal Reserve as it continues its fight to bring inflation down to its long-term target of two percent by keeping interest rates higher.
"This report could be just what investors and the Fed wanted to see -- another sign that demand is cooling off but not turning ice cold," said Bret Kenwell, US investment analyst at eToro trading platform.
The figures are "a good thing for the Fed and those who are looking for rate cuts later this year," Kenwell said.
Separate figures showed that US factory output beat expectations to rise sharply in May.
Asian investors extended the buying, with Tokyo and Taipei closing up more than one percent, while there were also healthy gains in Shanghai, Sydney, Singapore, Mumbai, Bangkok, Seoul and Wellington.
However, Hong Kong reversed early gains to fall into the red.
In Europe, Frankfurt and Paris extended Monday's advance after last week's sell-off fuelled by the political uncertainty in Europe. London was also higher around the half-way stage.
Investors brushed aside data Tuesday showing that German investor confidence rose less than expected in June after Europe's top economy saw an uptick in inflation following months of decline.
The ZEW institute's closely watched economic expectations index edged up to 47.5 points, from 47.1 points in May.
Although it was the index's 11th consecutive increase, analysts surveyed by FactSet had been expecting a bigger improvement in morale to 49.5 points.
- Key figures around 1345 GMT -
New York - Dow Jones: UP 0.3 percent at 38,881.34 points
New York - S&P 500: UP 0.1 percent at 5,481.12
New York - Nasdaq: DOWN 0.1 percent at 17,839.11
London - FTSE 100: UP 0.7 percent at 8,194.74
Paris - CAC 40: UP 0.6 percent at 7,617.86
Frankfurt - DAX: UP 0.2 percent at 18,104.49
EURO STOXX 50: UP 0.5 percent at 4,906.08
Tokyo - Nikkei 225: UP 1.0 percent at 38,482.11 (close)
Hong Kong - Hang Seng Index: DOWN 0.1 percent at 17,915.55 (close)
Shanghai - Composite: UP 0.5 percent at 3,030.25 (close)
Euro/dollar: UP at $1.0748 from $1.0738 on Monday
Euro/pound: UP at 84.55 pence from 84.49 pence
Dollar/yen: UP at 157.75 yen from 157.72 yen
Pound/dollar: UP at $1.2711 from $1.2706
West Texas Intermediate: UP 0.1 percent at $80.41 per barrel
Brent North Sea Crude: UP 0.1 percent at $84.30 per barrel
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H.Davis--SFF
