Global stocks boosted by bright earnings, Fed outlook

A street sign for Wall Street is seen outside of the New York Stock Exchange (NYSE) in New York City, New York, US, June 28, 2021. — Reuters pic
A street sign for Wall Street is seen outside of the New York Stock Exchange (NYSE) in New York City, New York, US, June 28, 2021. — Reuters pic

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LONDON, July 29 — World equity markets climbed today as the Covid recovery brightened on upbeat corporate earnings and the US Federal Reserve’s latest economic outlook, dealers said.

London stocks jumped by 1.0 per cent on a barrage of positive company results, including from Covid vaccine maker AstraZeneca, energy major Shell, bank giant Lloyds and defence firm BAE Systems.

Frankfurt added 0.4 per cent and Paris won 0.6 per cent, boosted respectively by the latest numbers from German carmaker Volkswagen and French oil titan TotalEnergies.

Trading in New York got off to a solid start too, with the Dow up by 0.6 per cent in initial exchanges.

“We are seeing modest gains so far. Earnings remain very promising,” OANDA analyst Craig Erlam told AFP.

Markets won a shot in the arm as British pharmaceuticals giant AstraZeneca revealed its Covid vaccine generated US$1.2 billion (1.0 billion euros) in sales in the first half of the year.

The news came one day after US drugmaker Pfizer lifted its annual revenue and profit projections on surging demand for its rival Covid-19 vaccine.

The oil sector was energised by news that both Shell and Total rebounded back into profit in the second quarter of 2021, boosted by the crude market’s recovery from virus turmoil.

Investors were meanwhile awaiting the latest US tech earnings from online behemoth Amazon, which soared in popularity during the pandemic due to spiking demand from locked-down populations.

Recovery on track: Fed

Asian and European equities also advanced after the Fed acknowledged the US economic recovery was well on track — but added that it would not taper monetary policy just yet.

The US central bank said the pandemic recovery was progressing well but it was still too early to take away ultra-loose policies that have helped nurse the economy back to health.

“The Fed gave a balanced performance on Wednesday that has just about satisfied the markets without getting investors too excited,” noted Erlam.

“All things considered, the markets look in a decent position going into an uncertain period as a result of the Delta surge.”

The US central bank has said it will maintain its massive bond-buying and record low interest rate scheme for as long as it takes to tame unemployment and keep inflation running hot for an extended period.

Traders were cheered by progress in Washington on President Joe Biden’s trillion-dollar infrastructure bill, which he has said could “transform America” and add to vast amounts of stimulus already pumped into the world’s top economy.

The developments overshadowed concerns about the spread of the Delta coronavirus variant that is sending infection rates spiking in several countries — including those with high vaccination rates — and forcing some governments to impose lockdowns or other containment measures.

In Asia, Hong Kong was lifted after China sought to reassure investors over its latest regulatory crackdown. — AFP

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