Tech firms dominate investments to lead stock rally
Stocks gained as an onslaught of positive earnings from technology companies reinforced the picture of a broadly robust corporate sector.
Netflix Inc. rallied 10% in premarket trading after subscriber numbers surpassed expectations. Futures on the Nasdaq 100 rose about 0.7%. Tech is dominating the investment picture in the US, where Tesla Inc. and International Business Machines Corp. are due to report later in the day.
The Stoxx 600 index climbed 0.8%, propelled by a rally in ASML Holding NV, Europe’s most valuable technology company, after orders more than tripled. SAP SE rose as it unveiled a restructuring plan to boost profits and increase its focus on artificial intelligence.
“We’re in somewhat of a sweet spot at the moment for equities,” said Francois Rimeu, a strategist at La Francaise Asset Management in Paris. “US economic newsflow is good, growth is flat in Europe, but it’s no drama and nobody believes in the resurgence of inflationary pressures.”
He added, “earnings in US tech and artificial intelligence are also holding up, which itself is backing the broader market.”
Meanwhile, a sentiment boost came from China’s plan to stimulate its economy by cutting the reserve requirement ratio for banks. The move should allow Chinese banks to step up lending and their purchases of government bonds. European commodities shares rallied and the Hang Seng Index added 3.6%.
In currency markets, the yen rose more than 0.5% against the dollar as investors decided that monetary policymakers are on track to scrap negative interest rates in the near term after all. Swaps markets have ramped up their bets on a 25 basis-point rate hike in April, following the Bank of Japan’s Tuesday meeting.
The spotlight turns now to
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