World stock indexes rose yesterday on solid company earnings, while the euro slipped as weaker-than-expected German inflation data kept alive chances of more stimulus from the European Central Bank.
Worries about Ukraine moved to the back burner, for now, after the United States and European Union imposed more sanctions on Russia for its role in backing the separatist movement in eastern Ukraine.
Relief that the West’s broadened anctions on Moscow were limited led some investors to step back into stocks and other risky assets and to pare safe-haven holdings in gold and US and German government debt.
US and German benchmark yields rose to 2.70 per cent and 1.50 per cent, respectively. US bond yields were also under pressure on a bond offering from iPhone maker Apple which may raise $8 billion to $10 billion, according to IFR, a unit of Thomson Reuters.
Oil prices rebounded after posting their biggest fall in a month as traders focused on the ongoing violence in eastern Ukraine and a possible delay in US relaxation of sanctions on Iran later this year.
Upbeat news from Finnish telecom giant Nokia and German chipmaker Infineon inspired European stock markets, while encouraging results from US drugmaker Merck and mobile provider Sprint helped Wall Street open higher.
In midday trading, the Dow Jones industrial average rose 106.41 points or 0.65 per cent, to 16,555.15, the S&P 500 gained 10.86 points or 0.58 per cent, to 1,880.29 and the Nasdaq Composite added 36.844 points or 0.9 per cent, to 4,111.245.
The FTSEurofirst 300 index of top European shares provisionally closed up 1.2 per cent at 1,352.41, while Tokyo’s Nikkei earlier closed down one per cent.
With the gains in the US and Europe, the MSCI world equity index, which tracks shares in 45 nations, rose 0.57 per cent.
Investors also took cues from the mixed signals on whether European policy-makers will ease policy in the coming weeks and months to fight off the threat of deflation.
ECB President Mario Draghi told German lawmakers on Monday that further monetary easing in the form of bond-buying remains some way off.
Central bank purchases of bonds, such as those the Federal Reserve has conducted and begun to dial back, are designed to hold down long-term interest rates and bolster economic activity. But they also erode the country’s currency.
The euro was down 0.3 per cent at $1.3806 and off 0.2 per cent at 141.65 yen.
The dollar index, a measure of the greenback’s value against six major currencies, rose 0.2 per cent at 79.823.
As traders speculate on the ECB’s next move, the Fed will begin a two-day policy meeting on Tuesday, and is expected to trim its bond-buying stimulus further.
In commodity markets, Brent crude was up $1.05, or 0.97 per cent, at $109.17 a barrel, and US crude was last up 52 cents, or 0.52 per cent, at $101.36 per barrel.
Spot gold prices erased earlier gains, dipping 31 cents or 0.02 per cent, to $1,295.29 an ounce.