You are here: Home » International » News » Markets
Business Standard

US, European shares advance as euro dives to lowest since 2017

The euro dropped to its weakest since 2017 after Russia halted gas supplies to Bulgaria and Poland, and investors fretted more about the region's economy

Topics
US stock market | Europe economy | Euro

Reuters  |  WASHINGTON/LONDON 

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US (Photo: Reuters)
File Photo

By Chris Prentice and Tommy Wilkes

WASHINGTON/LONDON (Reuters) - Key U.S. equity indexes ended higher after choppy trade on Wednesday on a boost from strong earnings from Microsoft and Visa, as commodity stocks lifted European shares to their first gain in four sessions.

The dropped to its weakest since 2017 after Russia halted gas supplies to Bulgaria and Poland, and investors fretted more about the region's economy.

The dollar continued its surge, on course for its biggest monthly gain since January 2015 as expectations mounted that the U.S. Federal Reserve will hike interest rates aggressively in coming months and the American economy will be stronger than the zone.

The Dow Jones Industrial Average rose 0.19% to end at 33,301.93 points, while the S&P 500 gained 0.21% to 4,183.92.

The Nasdaq Composite dropped 0.01% to 12,488.93.

Microsoft Corp jumped 4.8% % and Visa Inc surged 6.5%% on strong earnings, helping boost the S&P 500.

Some of Wall Street's biggest names have reported results this week, with investors seeking a counterweight to the deluge of negative news that has pounded stocks.

Google-parent Alphabet Inc fell 3.6% as slowing YouTube ad sales pushed quarterly revenue below expectations. Boeing Co dropped 7.5% after it disclosed $1.5 billion in abnormal costs from halting 777X production.

The pan-European STOXX 600 rose 0.7% after having hit six-week lows at the open, with miners and oil stocks both gaining.

German shares, which underperformed through the session, rallied at the close.

European corporate earnings were mixed. Credit Suisse reported another quarterly loss and Deutsche Bank warned the Russia-Ukraine conflict could hurt annual earnings.

Russia cut the flow of natural gas to Bulgaria and Poland for rejecting its demand to pay in roubles, taking direct aim at European economies. This led investors to sell euros and snap up U.S. dollars.

MSCI's benchmark for global equity retreated 0.17%. Emerging stocks fell 0.54%.

U.S. Treasury yields rose, as investors awaited greater clarity on the "restrictive" policy the Fed plans to pursue next week to combat inflation by curbing economic growth.[US/]

The dropped as low as $1.0512, its weakest against the dollar since May 2017. Analysts cited the war in Ukraine and growing concerns that the bloc's economy will fall into recession this year.

"The euro's blatant inability to rally on hawkish comments by European Central Bank members means lingering vulnerability to an external environment negatively affected by an ever-concerning situation in Ukraine and generalized USD strength," ING FX strategists wrote in a note to clients.

The dollar index measuring the greenback against a basket of rivals, hit a five-year high.

"The U.S. dollar benefits from the prospect of an ongoing flight to safety liquidity bid," said Jeremy Stretch, head of G10 FX strategy at CIBC.

 

GRAPHIC: Euro vs U.S. dollar https://fingfx.thomsonreuters.com/gfx/mkt/zdpxogxldvx/euro%20dollar%202.PNG

 

CHINESE REBOUND

There was more selling in Asia, with MSCI's broadest index of Asia-Pacific shares outside Japan down 0.82% after hitting its lowest since mid-March. Tokyo's Nikkei fell 1.17%.

Australian shares lost 0.78% as inflation hit a 20-year high, bringing interest rate rises closer.

Battered Chinese stocks bucked the trend, gaining almost 3% as data showed faster profit growth at industrial firms in March than a year earlier.

In the previous session, China stocks fell to their lowest in two years on fears that persistent COVID lockdowns would hurt economic activity and disrupt global supply chains.

Oil prices edged higher on ongoing global supply concerns, with Brent crude futures finishing up 33 cents to $105.32 a barrel and U.S. crude settling up 32 cents at $102.02 a barrel.

Spot gold prices hit a more than two-month low and were last down 1.05% by 4:34 p.m. EST (2034 GMT), under pressure from the dollar's rally. U.S. gold futures GCv1 settled down 0.8% at $1,888.70 per ounce.[GOL/]

 

(Additional reporting by Kanupriya Kapoor and Joice Alves; Editing by John Stonestreet, Mark Heinrich, David Gregorio, Nick Zieminski and Jonathan Oatis)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, April 28 2022. 08:44 IST
RECOMMENDED FOR YOU
.