What you need to know:
Global stocks rebound after recovery in China gathers momentum.
> Warm reception continues for Beijing’s policy response to slowdown fears.
> Renminbi touches fresh one-year low.
> Japan’s 10-year bond yield steady after sharp rise on BoJ policy speculation.
> Technology stocks in demand after Google beats earnings forecasts.
> Wall Street rises in opening trade.
“Investors are weighing up two key themes in the markets: a US which is booming but late-cycle and trade tensions which continue to evolve across the globe” — Nandini Ramakrishnan, global market strategist at JPMorgan Asset Management.
Wall Street is higher with European indices making progress. The sustained rally follows strong gains for Asian stock indices after Beijing’s adoption of a range of measures to address its slowing economy.
Meanwhile, global bond markets are recovering their poise after a sharp rise in yields during the previous two trading sessions and a report that the Bank of Japan was considering a change to its policy stance.
The S&P 500 is up 0.6 per cent in opening New York trade, while is the Nasdaq Composite is up 0.9 per cent.
The upbeat mood is being helped by forecast-beating results from Google’s parent Alphabet, with the stock up 4.6.
United Technologies stock is up 1.2 per cent after it lifted its forecast for the year. Verizon is up 0.3 per cent after earnings per share beat forecasts.
The Xetra Dax 30 in Frankfurt is up 1.5 per cent, with the Europe-wide Stoxx 600 rising 1 per cent. London’s FTSE 100 is 0.8 per cent stronger.
The Stoxx index tracking the tech sector in Europe is up 1.4 per cent.
Hong Kong’s Hang Seng made its biggest gain since June, rising 1.4 per cent, powered by financials and the technology sector.
The Hang Seng China Enterprises index of Hong Kong-listed Chinese companies rallied 2.3 per cent as construction and infrastructure-related stocks jumped after Beijing promised to adopt measures to boost economic demand, including speeding up the issuance of special bonds to local governments to support infrastructure projects.
Mainland China’s CSI 300 climbed 1.6 per cent to a one-month high as construction stocks rallied.
Japan’s Topix rose 0.5 per cent.
Stock to watch:
Just Group. What’s happening:
Retirement investment provider Just Group dropped after cautioning on the potential effect on its capital position of a regulatory consultation into equity release mortgages, released at the start of July.
The caution eclipsed better than expected results from Just as Barclays estimated that the Prudential Regulation Authority’s proposals could reduce the company’s capital position under Solvency 2 regulations to 121 per cent from 154 per cent.
Forex and fixed income:
China’s renminbi weakened to a new one-year low against the US dollar a day after the People’s Bank of China injected $74bn into the country’s banking system — the latest in Beijing’s series of signals that it intends to ease monetary policy.
The offshore renminbi weakened as much as 0.6 per cent to a low of Rmb6.8443, its lowest point against the dollar since June last year. The onshore renminbi, which is permitted to trade 2 per cent either side of a daily midpoint set by the country’s central bank, weakened as far as Rmb6.8246 per dollar, also its lowest level since June 2017.
The yield on 10-year Japanese government bonds is flat at 0.071 per cent, after rising to its highest level in six months on Monday. The 10-year US Treasury yield, which hit a five-week high on Monday, was flat at 2.950 per cent.
The dollar index is down 0.1 per cent at 94.581.
Japan’s yen is up 0.1 per cent at ¥111.18 per dollar, around its highest level for eight sessions on Monday.
The pound is down at $1.3079 and the euro is down 0.2 per cent at $1.1664.
Turkey’s lira is retesting its record low after its central bank failed to meet market expectations of a rate rise.
Oil prices are rising further as the latest bout of US-Iran tensions fade. Brent crude is up 0.2 per cent at $73.22 a barrel and West Texas Intermediate is up 0.6 per cent at $68.28 a barrel.
Gold is up 0.1 per cent at $1,225 an ounce.