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By Peter Nurse
Investing.com - European stock markets traded higher Tuesday, with the abrupt reversal in the U.K. government’s fiscal plans helping boost sentiment after weeks of turmoil.
By 03:40 ET (07:40 GMT), the DAX in Germany traded 1.2% higher, the CAC 40 in France rose 1.1%, and U.K.'s FTSE 100 climbed 1.1%.
New British finance minister Jeremy Hunt on Monday scrapped almost all of Prime Minister Liz Truss's previously-announced tax and spending measures later Monday, reducing concerns about the size of the increased borrowing needed to fund the plans.
The dramatic U-turn might lead to the Bank of England not hiking interest rates in November by as much as previously anticipated, with Morgan Stanley now looking for an increase of 75 basis points versus its previous estimate of 100 basis points.
The BoE is also likely to delay the sale of billions of pounds of government bonds to encourage greater stability in gilt markets, the Financial Times reported on Tuesday.
Looking at the corporate sector, Publicis (EPA:PUBP) stock rose 3.3% after the world's third-biggest advertising group raised its full-year guidance for the second time this year, after posting better-than-expected third-quarter organic revenue growth.
Roche (SIX:ROG) stock fell 0.8% after the Swiss drugmaker’s quarterly sales declined 6% as a slump in COVID-19 treatments and diagnostic testing weighed.
Swiss Re (OTC:SSREY) stock rose 1.8% despite the world’s largest reinsurer expecting claims of over $1.3 billion to cover the devastation caused by Hurricane Ian, resulting in a likely net loss of $500 million in the third quarter.
Credit Suisse (SIX:CSGN) stock rose 1.1% after Reuters reported that the Swiss banking giant has approached at least one Middle Eastern sovereign wealth fund for a capital injection.
The main economic data release Tuesday will be the German ZEW economic sentiment for October, which is expected to show investor sentiment falling further in Europe's largest economy.
Oil prices climbed Tuesday, helped by a weaker dollar, but this positive tone could be short-lived as Reuters reported late Monday that the Biden administration plans to sell oil from the Strategic Petroleum Reserve before next month's congressional elections.
An announcement, designed to reduce crude prices, is likely this week, and would market the remaining 14 million barrels from Biden's previously announced, and largest ever, release from the reserve of 180 million barrels that started in May.
The American Petroleum Institute releases its weekly estimate of U.S. crude stocks later in the session, and this will be of interest after last week’s massive 7 million barrel build.
By 03:40 ET, U.S. crude futures traded 0.7% higher at $85.15 a barrel, while the Brent contract rose 0.6% to $92.21.
Additionally, gold futures fell 0.3% to $1,659.00/oz, while EUR/USD traded 0.1% higher at 0.9846.
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