Global Markets: Global stocks buoyant on upbeat earnings

Modern Land (China)

26/10/2021 12:40

* Euro STOXX 600 up 0.5% to highest in seven weeks
    * UBS, financials lead more upbeat earnings
    * Supply chain headaches also weigh 
    * China property sector worries still worry investors
    * Dollar steady

    By Tom Wilson
    LONDON, Oct 26 (Reuters) - Shares around the world gained on
Tuesday, with upbeat corporate earnings buoying European shares,
though investor concerns lingered over supply chain problems
sparked by the coronavirus pandemic. 
    The broad Euro STOXX 600  .STOXX  hit its highest in seven
weeks, adding 0.5%, with German stocks  .GDAXI  adding 1%. 
    After a stellar quarter for U.S. and British banks,
Switzerland's UBS  UBSG.S  rose over 2% on its highest quarterly
profit since 2015 before giving up much of its gains, with the
financial services sector  .SXFP  climbing as much as 1%. 
    Wall Street futures  ESc1  NQcv1  were up 0.4%-0.6%, with
the earnings season reaching its peak and tech heavyweights
including Apple Inc  AAPL.O  and Alphabet  GOOGL.O  due to
report later. 
    Still, some analysts voiced caution over the impact of the
COVID-19 pandemic on supply chains. 
    Logitech International  LOGN.S  was among those hit,
slumping 7.4% after the computer keyboard, mouse and headset
maker reported a steep fall in operating profit and difficulties
securing enough semiconductor chips due to clogged up transport
links and stuttering factory restarts by suppliers.
    "Even though this has been a good earnings season in
aggregate we are starting to see more companies with supply
backlogs, hiring difficulties, and rising input prices that are
eating into profits," Deutsche Bank analysts wrote. 
    The MSCI world equity index  .MIWD00000PUS , which tracks
shares in 50 countries, added 0.2%
    Asian stocks earlier followed Wall Street's record highs
overnight, before giving up most of their gains. Electric car
maker Tesla Inc  TSLA.O  had boosted Wall Street after it joined
the $1 trillion market capitalisation club.    
    MSCI's gauge of Asia-Pacific stocks outside Japan
 .MIAPJ0000PUS  was up 0.3% after briefly touching its highest
in six weeks, following gains throughout October.     
    Weighing on the market were Chinese property stocks, which
extended losses as developer Modern Land  1107.HK  defaulted on
a payment, adding to worries about the effects of the debt
crisis at China Evergrande Group  3333.HK .  urn:newsml:reuters.com:*:nL1N2RM05A
    Hong Kong-listed mainland property firms  .HSMPI  dropped
4.3% while the mainland CSI 300 Real Estate Index  .CSI000952 
fell 2.8%. 
    China has said it will roll out a pilot real estate tax in
some regions, adding to existing concerns about real estate.
 urn:newsml:reuters.com:*:nL1N2RJ05C
    Some analysts voiced concern at the drag on global growth
from a slowdown in the world's second biggest economy.
    Citi strategist Robert Buckland said the bank had cut its
2022 global real GDP growth forecast to 4.2% from 4.4%. 
    "The impact of the China slowdown is becoming increasingly
evident in other Asian economies, but also in Europe where the
Germany growth forecast has been cut from 5.2% to 3.5%,"
Buckland wrote, warning of "a deeper and longer Chinese
slowdown".

   DOLLAR STEADY 
   The U.S. dollar index  =USD  was slightly down at 93.731,
with analysts expecting few major moves ahead of a slew of
central bank meetings in coming days. 
    The European Central Bank and Bank of Japan are both set to
hold monetary policy meetings on Thursday, though neither is
expected to take major action on interest rates.
 urn:newsml:reuters.com:*:nL4N2RM0AV urn:newsml:reuters.com:*:nL1N2RL003
    Sterling touched a new 20-month high against the euro,
driven by diverging interest rate expectations for Britain and
the euro zone. The pound traded at 84.1 pence to the euro, 0.2%
firmer on the day.  urn:newsml:reuters.com:*:nL8N2RM2U4
    Euro zone inflation expectations among bond investors opened
at a new seven-year high, shooting past the ECB's target,
leading to speculation that the ECB's pandemic-era stimulus was
unsustainable.  urn:newsml:reuters.com:*:nL8N2RM21M
    Already nudging multi-year highs, oil prices rose marginally
in a market gripped by tight global supply and strengthening
fuel demand in the United States and beyond.  urn:newsml:reuters.com:*:nL1N2RM05Y
    Brent crude  LCOc1  futures fell 0.2% to $85.85 a barrel, 
while the U.S. West Texas Intermediate (WTI) crude  CLc1 
futures were flat at $83.71 a barrel.

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Global asset performance     http://tmsnrt.rs/2yaDPgn
FAANG market cap    https://tmsnrt.rs/3E9sXkD
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 (Reporting by Tom Wilson in London; additional reporting by
Sujata Rao; Editing by Sam Holmes, Simon Cameron-Moore and
Timothy Heritage)
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))