World stocks are set to notch up a positive month for the first time since January, as a slew of positive earnings from US technology firms and marquee M&A deals help soothe memories of February tremors.
A seemingly successful Korean summit on Friday added the icing on the cake, pushing Asian bourses higher yesterday.
MSCI’s all-country index of global equities is up 1.3 per cent for April ahead of another torrent of first quarter earnings, with Apple the standout report yesterday.
This after strong earnings reports from Facebook and Amazon gave tech stocks across the world a shot in arm last week.
Reports of large M&A deals, led by T-Mobile’s proposed merger with Sprint in the US and the Sainsbury’s and ASDA merger in the UK, also kept global stock markets firmly in the spotlight.
Sainsbury’s shares shot up 20 per cent at the open after the retailer agreed a 13.3 billion pound merger with Walmart’s ASDA, and the news shook up retail stocks in Europe.
Overall, the pan-continental STOXX index rose 0.1 per cent while Germany’s DAX gained 0.3 per cent, buoyed by investors’ improved risk appetite.
This after Asian shares extended gains yesterday as tensions in the Korean Peninsula eased and first-quarter earnings shone, although some investors were cautious about the outlook amid the backdrop of a simmering US-China trade dispute.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed one percent, adding to a similar rise on Friday.
The index is now poised for a modest rise this month after two consecutive losses.
South Korea’s KOSPI index jumped 0.8 per cent and is set to end April more than 2.5 per cent higher following record profits from tech giant Samsung Electronics and after a successful inter-Korean summit.
Oil prices eased from recent highs with Brent crude futures off 94 cents at $73.70 a barrel, while US crude lost 67 cents to $67.43.
The dollar, meanwhile, held steady just below its strongest level since mid-January against as basket of currencies as traders awaited US consumer spending numbers to see whether the greenback can continue its recent run of gains.
The US Federal Reserve is also due to meet this week, and while no rate hike is expected, investors will look for clues on the future pace of hikes.
“There might be a tweak to the inflation language acknowledging the move towards two percent on year-on-year inflation rather than ‘have continued to run below two per cent’”, Deutsche Bank strategist Jim Reid said in a note.
Eurozone bond yields have remained well below the year’s highs. Germany’s 10-year government bond yield was up a basis point yesterday but still firmly below the 0.60 per cent mark.