Global Stocks Rise on Tech Sector Strength

By David Hodari 

Stocks around the world rose Tuesday amid continuing technology sector gains and a wave of political optimism around Brexit.

The Stoxx Europe 600 was up 0.2% in morning trading, buoyed by its retail and travel sectors, which each climbed 0.9%.

Renault shares climbed 1.3% after the company and partners Mitsubishi Motors and Nissan Motors announced plans to create a new joint decision-making body, as they attempt to move on from the turmoil caused by the arrest of former Nissan chairman and Renault chief executive Carlos Ghosn.

The British pound climbed 1% against the U.S. dollar Monday and was up a further 0.2% Tuesday after Prime Minister Theresa May secured concessions over Brexit from the European Union. The British Parliament was set to vote on her revised deal later Tuesday. A defeat would likely see the pound give up most of its short-term gains, analysts said.

The U.K.'s FTSE 100 benchmark fell 0.1%, with the index tending to move inversely to the British pound. The yield on 10-year German government bonds, often seen as a haven asset, had last risen to 0.091% from 0.061% late Monday.

The changes to the Brexit deal clarify the U.K.'s ability to sever economic ties with the EU in the event of an impasse in future trade negotiations. Traders reported thinner trading volumes in Europe, as investors paused ahead of the vote.

"The market started off hopeful, partly on follow through from the U.S. and partly on hopes from that British news overnight," said Stewart Cook, head of London sales trading at Berenberg. "But I think people are still skeptical and there's a lot of uncertainty around."

Upbeat trading in Europe echoed similar moves in Asia, where several major indexes extended their early-week rallies, helped by technology stocks. Hong Kong's Hang Seng was up 1.5%, with sector giant Tencent Holdings up 1.8%. The tech-heavy Korean Kospi was up 0.9%, boosted by a 2.3% increase in index heavyweight Samsung Electronics.

Asian tech stocks took their lead from their U.S. counterparts, which were boosted Monday as chip maker Nvidia agreed to buy computer-networking supplier Mellanox Technologies in a deal valued at $6.9 billion. Nvidia's stock jumped 7% on the day, rising a further 0.5% in after-hours trading, while Nasdaq-listed Mellanox added 0.2% to its 7.8% increase after the market close.

Ratings upgrades for Apple and Facebook allowed two of the U.S.'s largest tech companies to further fuel the sector's rise.

Those increases helped U.S. indexes snap five-day losing streaks and U.S. futures putting stocks on course for a second day of gains Tuesday. The S&P 500 and the Dow Jones Industrial Average were on course to advance 0.1% at the opening bell, and the Nasdaq-100 was set to climb 0.2%.

While the flow of earnings releases has begun to ebb, investors were awaiting results from Dick's Sporting Good before the market open. U.S. inflation data was also in focus.

Nonfarm payroll figures released Friday significantly undershot market expectations and fueled fears that the global economy is slowing, arriving against a backdrop of weak numbers out of Europe and Asia. Monday's retail sales figures, which showed a rise in consumer spending in January, served to ease those concerns.

Bets on rising inflation having slumped in recent weeks, and some strategists were skeptical that the U.S. economy will be able to strengthen.

"We don't see inflation in the system," said Manish Kabra, head of European equity quantitative strategy at Bank of America Merrill Lynch.

Still that could benefit U.S. stocks, Mr. Kabra said, with tame inflation often supporting equities prices.

The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was last down 0.2%. The yield on U.S. 10-year Treasurys rose to 2.664% from 2.643% Monday.

Brent crude oil futures were up 1% at $67.25 a barrel, while copper futures were up 1.1% at $6,493.50 a metric ton, with traders citing optimism in broader markets and the falling dollar.

Write to David Hodari at [e-mail]

(END) Dow Jones Newswires

March 12, 2019 06:58 ET (10:58 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.