Technology shares gain after China rally; dollar strengthens

Bloomberg

Tech shares pushed the Nasdaq Composite Index higher, while the broader US equity market was mostly little changed in the wake of a rally in Asian stocks after Chinese officials pledged to support the world’s second-biggest economy. The dollar strengthened, while the pound slumped and Italian bonds gave back most of their gains.
In China, the Shanghai Composite Index surged more than 4 percent, the biggest increase since March 2016, in the wake of verbal interventions from authorities at the end of last week and plans to cut personal income taxes. Chinese President Xi Jinping vowed “unwavering” support for the country’s private sector.
Italy’s sovereign bonds pared their advance after the nation’s populist government called for a budget dialogue with the European Union to address their differences. The pound retreated as the UK blurred more red lines in its Brexit negotiations, heightening the danger to Prime Minister Theresa May.
Risks still abound across global markets, from the continuing US-China trade showdown and President Donald Trump’s unpre- dictable actions ahead of American midterm elections. Still, equities are attempting to bounce back after a miserable few weeks, and company results from likes of Amazon, Alphabet, Microsoft and Intel as well as US growth data may provide a welcome stimulus in the coming days.
Elsewhere, commodities were mixed. Brent crude hovered close to $80 per barrel and gold dropped. Emerging-market stocks jumped. The South African rand rallied before the country’s budget.
Earnings season gathers pace with notable highlights including Amazon.com, Alphabet, Intel, Verizon, Microsoft, Twitter, McDonald’s, UBS, Deutsche Bank, Barclays, Total, United Technologies, Caterpillar, Halliburton and Linde. Monetary policy decisions are due in Europe, Indonesia, Sweden and Canada. ECB policy makers could on Thursday confirm that asset purchases will end this year, reiterating its pledge to keep interest rates at record lows through summer 2019. President Mario Draghi will hold a press conference. US gross domestic product growth may have slowed in the third quarter, yet remained near its best pace since mid-2015, according to forecasts ahead of Friday’s release.
The S&P 500 rose less than 0.1 percent in New York, while the Dow Jones Industrial Average fell less than 0.1 percent and the Nasdaq Composite Index increased 0.2 percent. The Stoxx Europe 600 rose 0.2 percent. The UK’s FTSE 100 gained 0.7 percent. Germany’s DAX Index edged 0.4 percent higher. The MSCI Emerging Market Index jumped 0.9 percent. The MSCI Asia Pacific Index increased 0.3 percent.
The Bloomberg Dollar Spot Index increased 0.2 percent. The euro weakened 0.3 percent to $1.1481. The British pound fell 0.8 percent to $1.2971. The Japanese yen weakened 0.2 percent to 112.76 per dollar. The yield on 10-year Treasuries dropped two basis points to 3.18 percent, while the two-year note yield fell less than one basis point to 2.90 percent. Germany’s 10-year yield fell two basis points to 0.44 percent. Brent crude decreased 0.1 percent to $79.68 a barrel. Gold dropped 0.4 percent to $1,222.33 an ounce.