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News | Business | Markets | Europe: European equities rise after Nasdaq strikes record

Naomi Rovnick and Hudson Lockett 

European equity markets opened higher on Tuesday, extending a bout of exuberance that began in the US overnight.
While London’s FTSE 100 traded flat, Germany’s Dax rose 0.8 per cent, France’s CAC 40 was 0.6 per cent higher and the Euro Stoxx 600 gained 0.4 per cent.
Europe’s gains were led by industries that have been among the biggest victims of the Covid-19 pandemic. Within the Euro Stoxx index, automotive shares rose 2 per cent, travel shares gained 1 per cent and the oil and gas segment rose 1.7 per cent.
Investors’ willingness to take more risk followed rises in Asian equities on Tuesday. Japan’s benchmark Topix index climbed 1.9 per cent and Australia’s S&P/ASX 200 rose 1.8 per cent in Asia-Pacific trading on Tuesday. Hong Kong’s Hang Seng rose 0.8 per cent while China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks was little changed.
This came after Donald Trump dropped his opposition to Microsoft acquiring the US operations of the popular mobile video app from its Chinese parent, ByteDance. Microsoft shares rose 5.6 per cent, lifting the tech-focused Nasdaq 1.5 per cent to a record, and sending a wave of optimism across Asian markets.
The S&P 500 rose 0.7 per cent overnight following the release of better than expected US manufacturing data. The Institute for Supply Management said on Monday that US manufacturing activity hit its highest level in almost 18 months in July, as orders rose despite a resurgence in new coronavirus infections.
The US dollar, which had its worst month in a decade in July because of concerns about the ability of the coronavirus-scarred economy to lead a global recovery, bounced around a two-year low.
The dollar index, which measures the performance of the US currency against those of trading partners, drifted from a reading of 93.54 to 93.457. The index has declined more than 6 per cent in the past three months.
Kristina Hooper, chief global market strategist at Invesco, said the US currency’s weakness was “likely to persist” in the near term as the withdrawal of emergency unemployment benefits weighted on the US economic recovery.
“We are already starting to see a stalling of economic data and families losing their benefits could make August’s data even worse,” she added. “However, the US Senate still seems far from reaching a deal on fiscal stimulus.”
The price of gold, which has surged to an all-time high in recent weeks as investors sought out haven assets, was steady at $1,973 per troy ounce.
Brent crude, the international oil benchmark, dropped 0.6 per cent to $43.87 per barrel ahead of the American Petroleum institute releasing data that will show how much unsold oil inventory is idling in US warehouses.
Oil major BP cut its dividend 50 per cent on Tuesday morning, the first time the group has lowered its payout to shareholders since the Deepwater Horizon disaster in 2010, as it unveiled a record $6.7bn quarterly loss.


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