Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Tech reboots shares, dollar takes Thanksgiving breather

EconomyNov 25, 2021 01:31PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. An electronic stock quotation board is displayed inside a conference hall in Tokyo, Japan November 1, 2021. REUTERS/Issei Kato 2/2

By Marc Jones

LONDON (Reuters) - A tech shares bounce carried European equities higher on Thursday, following similar gains on Wall Street and Asia and helped also by a small pullback in the dollar from a 17-month high.

With U.S. markets closed for Thanksgiving, focus was trained on Europe where a surge in COVID-19 cases is raising the prospect of lockdowns going into the Christmas shopping season.

Those concerns had knocked the pan-European STOXX 600 index to a three-week low on Wednesday, but it was up almost half a percent as a 1% tech sector gain offset the eighth straight fall in travel and leisure stocks.

"We continue to treat every sell-off as the buy-the-dip opportunity," said Marija Veitmane, global markets strategist at State Street (NYSE:STT) Global Markets, adding that firms' earnings were still robust and that borrowing costs were still very low.

An indicator of the bullishness underpinning equity markets can be seen in data. Year-to-date inflows into equity funds have barreled past the $1 trillion mark, more than the combined previous 19 years of flows, according to BofA strategists.

In the government bond markets, which drive those borrowing costs, there was a small dip in German yields after Social Democrat and former finance minister Olaf Scholz struck a three-way coalition deal on Wednesday that sees him replace Angela Merkel at the helm of Europe's largest economy.

It was the first fall in yields in three days. They have risen sharply again this week as traders have ramped up bets that rising inflation will see the European Central Bank join the U.S. Federal Reserve in hiking interest rates next year. [GVD/EUR]

"The inflation debate, whether is it temporary or not, is still there," said Dirk Schmacher, Head of European Macro Research at Natixis.

He also flagged the renewed lockdown in Austria and the fast rising COVID-19 case numbers in parts of Germany and elsewhere in Europe.

THANKSGIVING CALM

Emerging markets saw some relative calm after a turbulent few days that has seen Turkey's lira battered again, Russia and Ukraine tensions rise, and Mexico's president stoke worries about central bank independence by installing a virtual unknown at the helm. [EMRG/FRX]

The lira shrugged off early losses to rise 0.5%, extending Wednesday's gains which came after a brutal 11-day, 24% losing streak after President Tayyip Erdogan had backed more interest rates cuts.

Russia's rouble moved away from recent four-month lows as Moscow said it hadn't turned its back on Eastern Ukraine peace talks, while South Africa's rand recovered from a one-year trough.

In Asia overnight, the tech recovery that had been kicked off by the Nasdaq [.N] helped Japan's Nikkei finish 0.7% higher and meant Hong Kong's tech index was able to snap six sessions of losses.

Other share moves were more muted however. MSCI's broadest index of Asia-Pacific shares outside Japan finished flat after little movement all day. [.T][.SS]

In broad terms, "when it comes to regional equities allocation, we're watching the U.S. dollar which is making new highs and that is a headwind for emerging market equities," said Fook-Hien Yap, senior investment strategist at Standard Chartered (OTC:SCBFF) Bank wealth management.

The dollar is trading near its highest in almost five years versus the Japanese currency at 115.3 yen, and consolidating a near 18-month high against the euro which was a fraction higher at $1.1222. (FRX)

Several U.S. Federal Reserve policymakers have said in recent days that they would be open to speeding up the tapering of the central bank's bond-buying programme if the high rate of inflation held, and move more quickly to raise interest rates, minutes of the Fed's Nov. 2-3 policy meeting showed.

"The market is now pricing in more than two hikes next year, but we think that is overly aggressive. We are only looking for about one hike next year," said Yap. Goldman Sachs (NYSE:GS) expects three rate hikes next year.

These expectations have pushed U.S. treasury yields higher, albeit inconsistently, with benchmark 10-year notes closing for the Thanksgiving break at 1.6427% having risen as high as 1.6930% on Wednesday.

U.S. Treasuries and U.S. stock markets will resume on Friday albeit for shortened session meaning trading is almost certain to be thin.

Oil prices see-sawed meanwhile after a turbulent few days in which the United States said it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain to try to cool oil prices after calls to OPEC+ to pump more went unheeded.

Investors had already largely priced the move though, after more than a week of signals from the major players, meaning Brent actually jumped on Wednesday. It was last trading at $82 a barrel in London, which was up 6% from the week's lows but down fractionally lower on the day. [O/R]

Spot gold edged 0.17% higher to 1791 an ounce.

Tech reboots shares, dollar takes Thanksgiving breather
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email