European stocks started the month in the dark, following an overnight rally on Wall Street as traders bet on strong U.S. tech earnings to lift market sentiment soured by expectations of higher interest rates. the central bank.

The regional Stoxx 600 index rose 1.3% in early trades, with its technology sub-index adding 2.1%, lifted by gains from large components including German software group SAP and maker ASML semiconductor equipment.

This week brings quarterly financial updates from Alphabet, Amazon and Facebook owner Meta, titans of an industry that has come under pressure from the specter of higher borrowing costs.

On Monday, the S&P 500 gained 1.9%, with its information technology sub-index jumping 2.7%. The tech-heavy Nasdaq Composite index rose 3.4%, marking its best day since March 2021.

In government debt markets, the yield on the 10-year German Bund held above zero on Tuesday, in a rare sustained exit from negative territory, as high inflation prompted the European Central Bank to rethink its ultra-accommodative monetary policies.

The yield on the 10-year US Treasury note remained stable at 1.78%, after rising considerably since the start of the year.

In Asia, Hong Kong’s Hang Seng Index rose 1.1% and South Korea’s tech-heavy Kospi gained 1.9%.

Futures markets implied the S&P 500 would be flat at the New York open, with the tech-focused Nasdaq 100 gaining 0.1%.

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