Those worries had brought the Pan-European STOXX 600 Index to a three-week low on Wednesday, but was up almost 0.5% on Thursday, as the 1% increase in the technology sector offset the eighth consecutive decline in the travel and leisure segment.
“We continue to treat each sell-off as an opportunity to buy lower,” said Marija Veitmane, global markets strategist at State Street Global Markets, adding that company earnings are still strong and borrowing costs are still very low.
In bond markets there was a small decline in the yield of the German Bund after Social Democratic leader Olaf Scholz reached a three-way coalition agreement on Wednesday that will replace Angela Merkel at the helm of Europe’s largest economy.
It was the first drop in borrowing costs in three days. This week they have risen sharply as traders raise their bets that accelerating inflation will see the European Central Bank teaming up with the Federal Reserve in raising interest rates next year.
“The debate on inflation, whether temporary or not, is still there,” said Natixis’ Dirk Schmacher, also pointing to the new lockdowns in Austria and the rapid increase in the number of cases in some parts of Germany.
In Asia, the technological recovery that had started on the Nasdaq on Wednesday, boosted the Japanese Nikkei 0.8%, while the Hong Kong Tech Index ended six losing sessions, with Alibaba among the top winners.
However, other stock movements were more cautious. MSCI’s broader Asia-Pacific Stock Index excluding Japan was flat throughout the day, a slight advance of 0.04%.
In foreign exchange markets, the dollar was trading near its highest level in nearly five years against its Japanese peer, at 115.3 yen, and was consolidating a nearly 18-month high against the euro, at $ 1.1222.
The Expectations of faster moves by the Fed have driven up the yield on US Treasuries, albeit inconsistently. Benchmark 10-year notes were yielding 1.6427% after rising to 1.6930% the day before.
In commodity markets, crude prices were down more than 0.5% at 1033 GMT, while spot gold was up 0.17% at $ 1,791 an ounce.
Source From: Ambito
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