British stocks boosted European stocks on Tuesday as investors relied on the Westminster government to refrain from new restrictions due to coronavirus in England, and survey data shows that China’s vast manufacturing industry grew faster than analysts expected.
The FTSE 100 UK stock index rose 1.5 percent as its multinational commodities and banking stocks, which respond well to signs of strong global growth, outperformed.
Domestic FTSE 250 rose 2.2 percent, led by travel stocks, after leading epidemiologist Neil Ferguson told BBC Radio 4 Today a program that cases of Omicron in adults could be on a plateau in London.
“The threat of further restrictions from Omicron seems to have withdrawn and, of course, these restrictions are slowing economic growth, ”said Roger Lee, head of British capital strategy at Investec.
European regional equity indicator Stoxx 600 added an additional 0.9 per cent on Tuesday, building on a record high set in previous trading. London markets were closed on Monday due to a public holiday.
On Wall Street, futures markets showed the S&P 500 stock index will open 0.4 percent higher, building on a record high at closing on Monday, where S&P pulled growth due to gains from Apple and electric car maker Tesla.
Procurement Manager Index for the Chinese manufacturing sector, which produces Caixin and Markit, rose to a higher-than-expected reading of 50.9 for December. This has brought the index – which brings together executives’ answers to questions on topics such as employment plans and new orders, and shows expansion when it rises above 50 – to its highest level since June.
Growth has shown that “the impact of diffuse Covid-19 outbreaks is under control,” said Wang Zhe, a senior economist at Caixin Insight Group.
Contracts betting on the direction of the U.S. Nasdaq 100 technology-focused index won 0.2 percent. This figure rose 1.1 percent on Monday as Apple became the first company to reach a market capitalization of $ 3 billion, stressing analysts’ concerns that U.S. stock markets are overly dependent on the performance of a group of large technology companies.
“The U.S. economy seems to be deep in its business cycle, which usually sees market leadership narrowly on mega-cap stocks,” said Tan Kai Xian, an analyst at Gavekal, arguing that increasing U.S. wages would exacerbate the trend.
“In such moments, companies with low margins are the most injured and can turn into losses. In contrast, companies with higher margins can continue to grow, ”he said.
“If the Big Tech crutch is discarded, then watch out,” said Patrick Spencer, vice president of stocks at RW Baird. “The concern is that one of these very large technology stocks is declining and that this is starting a waterfall of sales.”
In government debt markets, yields on 10-year U.S. Treasury bonds, which are reversing its price and sensitive to expectations of higher interest rates and inflation, rose 0.04 percentage points to 1.67 percent on Tuesday. The same yield rose more than 0.13 percentage points on Monday against government bond prices fell sharply.
In Asia, Tokyo’s Nikkei 225 closed 1.8 percent higher, while Hong Kong’s Hang Seng index remained unchanged.
Brent oil, the benchmark for oil, rose 0.9 percent to $ 79.73 a barrel ahead of a meeting of members of the Opec + group.