SINGAPORE (AP) — Global markets were broadly higher Wednesday after major companies reported strong earnings for the third quarter, soothing fears that rising interest rates may deter corporate investment.
KEEPING SCORE: In Europe, Britain’s FTSE 100 rebounded 1.5 percent to 7,138. Germany’s DAX rose 1.2 percent to 11,421 and France’s CAC 40 rallied 2.1 percent to 5,083. Wall Street was set for early gains. Dow futures added 0.7 percent and S&P 500 futures rose 0.8 percent higher.
ASIA’S DAY: Japan’s Nikkei 225 index jumped 2.2 percent to 21,920.46 and the Shanghai Composite index added 1.4 percent to 2,602.78. Hong Kong’s Hang Seng rose 1.6 percent to 24,979.69. The Kospi in South Korea gained 0.7 percent to 2,029.69. Australia’s S&P-ASX 200 reversed early losses, finishing the day 0.4 percent higher at 5,830.30. Shares were higher in Taiwan and throughout Southeast Asia.
U.S. EARNINGS: Big companies including Mondelez, which makes Oreos, Cadbury chocolates and Trident gum, have reported strong quarterly earnings. Mondelez’s stocks rose by the most in a year, gaining 5 percent. Athletic apparel maker Under Armour also posted strong quarterly earnings. Even Facebook’s shares inched higher in after-hours trading after it reported revenue that was slightly under projections. This assuaged concerns that steady interest rate hikes by the Federal Reserve are raising the cost of borrowing. Another increase is expected later this year, with more to come in 2019.
In Europe, earnings were also largely positive: shares in Airbus were up 2.6 percent after it reported a rise in profits and cosmetics maker L’Oreal’s stock rallied 7 percent on upbeat results.
ANALYST’S TAKE: “Global economic fundamentals are still intact. Although growth has slowed in the third quarter for most economies, it’s not contracting,” said Francis Tan, an investment strategist at UOB private bank. “The drop in global equities this month, to the tune of $8 trillion, makes it an irresistible thesis for investors to get back into the action,” he said.
CHINESE PMI: On Wednesday, China reported that its official manufacturing purchasing managers’ index slowed to 50.2 points in October from 50.8 a month earlier. Figures had declined across the board except for production outlook, which was unchanged. Readings above 50 indicate expansion, while lower numbers indicate contraction on the index’s 100-point scale. Still, sentiment was supported by an open call from the Chinese government to funds to support the equity markets.
BANK OF JAPAN: As expected, Japan’s central bank kept its monetary stance intact as it wrapped up its latest policy meeting. The Bank of Japan kept the key interest rate at minus 0.1 percent and its target for long-term bond rates at around zero. The bank also downgraded its GDP forecast for the fiscal year through March, to 1.4 percent from 1.5 percent, with an estimate of 0.8 percent for the following fiscal year.
ENERGY: Benchmark U.S. crude added 23 cents to $66.40 per barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 86 cents to settle at $66.18 a barrel in New York. Brent crude, used to price international oils, gained 38 cents to $76.29 per barrel. In the previous session, it dropped $1.42 to $75.95 a barrel.
CURRENCIES: The dollar was flat at 113.13 yen. The euro edged down to $1.1341 from $1.1343.
Copyright © 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.