European shares gained for a second straight session on Wednesday, as strong corporate earnings and a rise in sensitive sectors of the economy boosted sentiment after US inflation growth slowed sharply in April.
The pan-European Stoxx 600 index rose 1.7 percent at the close, posting its biggest percentage gain since late March. The mining, auto industry and oil and gas sectors each jumped more than 3 percent.
Investor sentiment was supported by a batch of upbeat earnings reports and merger activity.
Sweden’s Match shares jumped 9 percent after Philip Morris International announced that it would make a cash offer to buy the Swedish tobacco company, amounting to about 161.2 billion Swedish crowns (16 billion dollars).
Shares of German thyssenkrupp group jumped 11.2 percent after it raised its forecast for sales and operating profits for 2022, while shares of Britain’s Compass Group rose 7.4 percent with an increase in its annual revenue forecast.
European Central Bank President Christine Lagarde said on Wednesday the bank was likely to end its bond-buying stimulus program as early as the third quarter of this year, followed by an interest rate hike that could come “a few weeks”.
Data showed that US consumer price growth slowed sharply in April as gasoline prices fell from record highs, indicating that inflation is likely to have peaked. But it is likely to remain elevated for a while, keeping the Federal Reserve (the US central bank) on a path of raising interest rates.
Shares in French train maker Alstom lost 5.2 percent after the market was divided over comments about cash flows.
Germany’s Bayer shares fell 6.2 percent after the US administration asked the Supreme Court not to consider the agrochemical and pharmaceutical company’s lawsuit to dismiss lawsuits filed by clients who said the company’s weed killer Roundup causes cancer.
Japanese stocks
Japan’s Nikkei index rose at the close on Wednesday, as investors looked to stocks of companies with strong expectations, but gains were limited with US inflation data expected later in the day. The Nikkei rose 0.18 percent to close at 26,213.64 points, after declining earlier in the session.
Investors are awaiting US consumer price index data for April for indications that inflation may start to ease, with expectations that it will register an increase of 8.1 percent on an annual basis, compared to 8.5 percent in March.
The broader Topix index fell 0.60 percent to 1,851.15 points, affected by a 4.43 percent drop in Toyota Motor Co., after expectations of a decline in profits.
During the trading session, Toyota warned that operating profit this year may fall by about 20 percent “due to unprecedented increases in materials and logistics costs” against the background of a 33 percent drop in fourth-quarter profits.
The auto sector index fell 3.31 percent.
Sony Group shares rose 2.1 percent after the camera and auto equipment maker announced that its fourth-quarter operating profit more than doubled on an annual basis.
Video game maker Nintendo shares rose 3.25 percent.
69 shares rose on the Nikkei index, compared to 153 shares declined.
US stocks
The Standard & Poor’s 500 and Nasdaq indexes on Wall Street closed higher on Tuesday, supported by the rise of major growth companies, after a sell-off in the previous session, with US Treasury yields falling.
Meanwhile, bank shares fell. The benchmark 10-year Treasury yield fell from its highest level in more than three years to less than 3 percent.
Trading was choppy, with major indices moving up and down amid nervousness among investors ahead of the release of US consumer price index data on Wednesday and producer price data on Thursday.
Apple shares rose, giving the biggest boost to the S&P 500 and Nasdaq indices.
According to preliminary data, the Standard & Poor’s 500 closed up 10.77 points, or 0.27 percent, to 4002.01 points, while the Nasdaq Composite Index rose 114.11 points, or 0.98 percent, to end the session at 11737.35 points.
The Dow Jones Industrial Average fell 82.39 points, or 0.26 percent, to close at 32,163.31 points.
(Archyde.com)