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(Sharecast News) - European shares were sharply higher on Tuesday as French bond yields eased and the euro rallied slightly against the dollar.
The pan-regional Stoxx 600 index was up 0.74% to 638 at 1046 GMT with all major bourses higher.
France's CAC 40 gained 0.70% as spreads with safer German bonds tightened to around 130 basis points after hitting an intra-day high of 156 on Monday on rising fiscal concerns over the country's swelling deficit.
The government has proposed a massive package of tax rises and spending cuts which is expected to face widespread public protest.
France central bank governor Emmanuel Moulin warned the country risked being "gradually strangled by rising interest rates" if the government could pass its budget proposals.
Spain's IBEX was up 0.87% after socialist Prime Minister Pedro Sanchez called a snap poll for November 29 in response to right-wing parties blocking legislation to deal with a spike in housing costs.
The euro, which slipped to $1.12 against the dollar yesterday, was up 0.12% to $1.1244.
On the economics front, construction activity across the eurozone remained firmly in contraction territory in September, with housebuilding suffering its steepest decline in more than a year and a half, according to a survey released on Tuesday.
The S&P Global eurozone construction PMI total activity Index edged up to 43.4 from 43.0 in August, but remained well below the 50.0 mark separating growth from contraction and below its long-run average of 47.1.
Meanwhile in Germany, manufacturing orders slumped in August, falling more than expected. Factory orders were down 10.6% month on month, according to the federal statistics office, but were up 2.7% compared with August last year.
"Global equity markets continued their march toward record highs as investors shrugged off elevated oil prices, multi-decade highs in sovereign bond yields, and deepening political risk across Europe," said Tickmill Group market strategy partner Patrick Munnelly.
"A megacap technology rally propelled the Nasdaq 100 to a fresh all-time high, while strong momentum in Nvidia and Microsoft left the S&P 500 within striking distance of its peak. AI-linked earnings growth continues to overpower broader macro discomfort, providing an effective floor for risk appetite."
In equity news, Genmab shares surged after upbeat latestage lymphoma trial results with AbbVie.
Reporting by Frank Prenesti for Sharecast.com