European stocks gain amid economic support policies

Bloomberg

European stocks snapped a two-day losing streak as investors kept faith with economic support policies, helped by some reassuring earnings news. The dollar fluctuated alongside US equity futures.
Shares in Europe’s largest technology company, SAP SE, rose 7% after it reported better-than-expected second quarter revenue on returning demand for software in Asia, boosting hopes for a deeper recovery. It added to momentum in the global tech sector, with the Nasdaq Composite closing at a record high on Wednesday.
Chinese equities outperformed as the Shanghai Composite notched an eighth day of gains, helped by signals of official support and strong demand from retail traders. The offshore yuan rose above 7 per dollar to its strongest since mid-March. Gold held above $1,800 an ounce.
Investors have continued to look past news of rising virus infections, concentrating on the continued reopening of economies. Confidence in policy support measures has held, even as the number of US infections topped 3 million, more than a quarter of the global total. Arizona and Florida continued to report increases, albeit at levels below their seven-day averages.
“Risk is bouncing back broadly in equities but the real show is in Chinese equities, US technology stocks and then gold,” said Steen Jakobsen, chief investment officer at Saxo Bank A/S. “US Covid-19 cases rose yesterday to a new record and signs are now emerging that daily deaths are on the rise nationally which could suddenly become a new risk factor for the market.”
Elsewhere, oil slipped towards $40 a barrel in New York after swelling US crude stockpiles raising fresh concerns about supply.
Futures on the S&P 500 Index were steady at 9:33 am London time and the Stoxx Europe 600 Index rose 0.3%.
While the UK’s FTSE 100 Index declined 0.2%, the MSCI Asia Pacific Index climbed 0.6%. The MSCI Emerging Market Index jumped 1.7%.
The Bloomberg Dollar Spot Index fell 0.1% and the euro was little changed at $1.1335.
While the British pound added 0.2% to $1.2637, the onshore yuan strengthened 0.3% to 6.987 per dollar. The Japanese yen was little changed at 107.21 per dollar.
While the yield on 10-year Treasuries sank one basis point to 0.65%, the yield on two-year Treasuries was unchanged at 0.16%. Germany’s 10-year yield fell one basis point to -0.45% and Britain’s 10-year yield decreased one basis point to 0.173%. Japan’s 10-year yield also declined less than one basis point to 0.031%.
As West Texas Intermediate crude declined 0.6% to $40.65 a barrel, Brent crude declined 0.5% to $43.08 a barrel. Gold strengthened 0.3% to $1,813.61 an ounce.