World shares hover near 20-month highs

LONDON Wed Jan 23, 2013 4:50pm IST

Traders work at their desks at the Frankfurt stock exchange February 1, 2012. REUTERS/Alex Domanski/Files

Traders work at their desks at the Frankfurt stock exchange February 1, 2012.

Credit: Reuters/Alex Domanski/Files

Related Topics

Stocks

   
Kishore Pandey, 82, lies on a bed as his daughter, Usha Tiwari, holds him and a priest stands by them (L) at Mukti Bhavan (Salvation House) in Varanasi, in the northern Indian state of Uttar Pradesh, June 19, 2014. REUTERS/Danish Siddiqui

Waiting to die at Salvation House

The city of Varanasi is Hinduism's holiest city and many Hindus believe that dying there and having their remains scattered in the Ganges allows their soul to escape a cycle of death and rebirth.  Slideshow 

LONDON (Reuters) - World shares hovered near 20-month highs on Wednesday, supported by some upbeat corporate earnings, an easing of fears about the U.S. debt ceiling and a better outlook for the global economy.

But with many major equity indexes close to levels not seen since the financial crisis began five years ago while the outlook for global growth remains modest, investors have become cautious about pushing higher until they see how company earnings fare.

"In terms of the market, the crisis is over, but in terms of the real economy, we still have to live through some of the effects," said Nick Kounis, head of macro economic research at

ABN AMRO.

However, he added: "We think enough has been done to sow the seeds of a gradual economic recovery this year which will gain pace next year."

Europe's FTSEurofirst 300 index was little changed near a 22-month high on Wednesday. Germany's DAX, which is close to a high since 2008, was up 0.2 percent, and the UK FTSE 100 index had gained 0.1 percent, having briefly reached a 2013 peak.

The focus in the major share markets was on corporate earnings. Mining giant BHP Billiton (BLT.L) pointed to solid iron ore demand from steelmakers, and consumer goods conglomerate Unilever (ULVR.L) reported strong sales growth.

Though this was offset to some extent by a weak performance by the telecom sector.

Overall, of the 13 percent of companies on the S&P 500 index that have reported results so far, 75 percent have met or beaten forecasts, according to Thomson Reuters StarMine.

In Europe, only 2 percent of all STOXX Europe 600 firms have announced results, but 86 percent of them have met or beaten expectations.

DEBT DEMAND

The European debt markets were still basking in the glow of Tuesday's strong 10-year bond sale by Spain, which was swamped with demand from foreign investors, with Portugal expected to return this week for the first time since its 2011 bailout.

German 10-year yields were 1.5 basis points lower, but traders said this had more to do with some investors looking to balance their portfolios as the month end approached following recent gains in peripheral debt.

Prices have risen across the euro zone debt market this month as foreign investors returned, reassured by the European Central Bank's policies to support the region and a strong desire for higher yielding assets.

Sentiment in all markets is expected to improve further if the U.S. House of Representatives votes in favour of a measure to extend the U.S. debt limit for nearly four months later today, ending fears the government could fail to meet its debt obligations.

YEN GAINS

Meanwhile, the yen pushed higher against the dollar and the euro as monetary easing announced in Japan on Tuesday by the central bank failed to satisfy some investors.

The Bank of Japan doubled its inflation target to 2 percent and adopted an open-ended commitment to buy assets starting in 2014, disappointing some in the market looking for more immediate easing steps.

The dollar fell 0.4 percent to 88.30 yen, while the euro slid 0.8 percent to 117.42 yen. The weakness of the common currency against the yen also dragged it lower against the greenback.

Oil prices were steady as investors awaited inventory data from the United States for clues to demand in the world's largest oil consumer.

Brent crude was 10 cents up at $112.52 a barrel, and U.S. crude for March delivery rose 11 cents to $96.79, off a four-month high of $96.90 hit earlier in the day.

(Reporting by Richard Hubbard; Editing by Will Waterman)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

India-Nepal Ties

REUTERS SHOWCASE

Tackling Food Prices

Tackling Food Prices

India to free up extra 10 million tonne wheat in open market  Full Article 

Facebook Results

Facebook Results

Facebook beats Wall Street targets, stock hits record high  Full Article 

GM Recall

GM Recall

GM recalls 717,950 vehicles in U.S., not for ignition switches  Full Article 

Hyundai Motor Results

Hyundai Motor Results

Hyundai Motor Q2 profit slips as firmer won, U.S. discounts hurt  Full Article 

Nokia Results

Nokia Results

Nokia raises networks outlook after Q2 profit beats estimates  Full Article 

Factory Sector

Factory Sector

China July HSBC flash PMI at 18-month high of 52.0   Full Article 

Breakingviews

Breakingviews

Apple winds up earnings hope for new gadgets  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage