© Reuters. File photo: On June 21, 2021, a man looks at an electronic board displaying the Nikkei index outside a brokerage company in the business district of Tokyo, Japan. REUTERS/Kim Kyung-Hoon
LONDON (Reuters)-After Asian stocks recovered overnight, European stocks rose in early trading on Monday, with recent strong earnings and US infrastructure bills boosting risk appetite, although oil prices were hit by concerns about Chinese demand.
The MSCI World Equity Index, which tracks stocks in 49 countries, rose 0.4% at 0805 GMT after Asian stocks recovered some of their recent losses.
MSCI’s main European index rose about 0.8%, while setting a record high, rising 0.7%.
As the senator proposed a $1 trillion infrastructure spending plan, the United States may introduce more fiscal stimulus measures, which boosted risk appetite.
Earlier in the session, the Chinese stock market rebounded after a sell-off triggered by a regulatory crackdown in Beijing.
However, a survey found that due to demand shrinking for the first time in more than a year, China’s factory activity growth in July dropped sharply, triggering concerns about demand from the world’s second largest oil consumer, and oil prices fell.
As rising input costs and a new wave of coronavirus infections overwhelmed solid global demand, Asian factories encountered difficulties in July, highlighting the fragility of the region’s recovery.
At 0805 GMT, futures prices fell 1.2%, and US West Texas Intermediate (WTI) crude oil futures also fell 1.2% on the same day.
Market attention now turns to July PMI data, as well as the Reserve Bank of Australia meeting on Tuesday, the Bank of England meeting on Thursday, and the US non-farm payrolls data on Friday.
“Just a few weeks ago, people were still talking about whether the central bank was confident enough to start curtailing some of the stimulus measures implemented since the beginning of the pandemic as the global economy recovers,” said Chief Marketing Officer Michael Hewson. CMC Markets UK analysts said in a client report.
“This statement seems to have changed the question of whether the economic rebound we have seen so far this year has begun to level off and start to slow down.”
But UBS said in a client report that the stock market’s rise is reasonable and will continue.
“We believe that the trend of reopening and recovery is on the right track, and we continue to see the stock market rise. However, we believe that the cyclical parts of the market, including energy, finance, and the Japanese stock market, have the most room for upside,” Chief Investment Officer Mark Haefele Express. UBS Global Wealth Management.
Due to a surge in demand due to the reopening of the economy, manufacturing activities in the Eurozone continued to expand at a rapid rate in July, but the supply bottleneck led to a surge in input costs.
The economic recovery in Europe last quarter exceeded all expectations, and with the relaxation of coronavirus restrictions, US consumers have indulged their consumption in June-a trend that may ensure that the US releases a strong employment report this weekend.
Of the nearly 300 recent earnings reports in the United States, approximately 89% exceeded analysts’ earnings expectations. Earnings in the second quarter are now expected to increase by 89.8%, compared with the 65.4% forecast in early July.
The yield of major bonds fell in July. At 0807 GMT, the European benchmark 10-year German bond yield was -0.449%, which was around -0.2% at the opening of last month.
The exchange rate was 1.2372%, almost unchanged on the day, but has gradually declined since April.
Currency, the euro fell about 0.1% to 91.98, hovering above a one-month low, while the euro rose about 0.2% to 1.18855 US dollars.
The Australian dollar, which is considered a liquidity representative of risk appetite, rose 0.1%.