European Shares Tick Up, US Stocks Push to Record Highs
European markets advance with tech shares at the forefront. US stocks also gain on Wednesday, S&P500, and Nasdaq close at record highs.
*Sage FX would like to state that traders should research extensively before following any information given hereby. Any assumptions made in this article are provided solely for entertainment purposes and not for traders to guide or alter their positions. Please read our Terms & Conditions and Risk Disclosure for more information.
- European markets advance with tech shares at the forefront
- US stocks also gain on Wednesday, S&P500, and Nasdaq close at record highs
European markets rose on Wednesday as a broad move higher defined the session. Commodity stocks that were pressured on the previous day pared their losses, while technology companies continued their upside swing.
The pan-European Stoxx 600 jumped 0.78%, or 3.55 points, to a session close of 459.53. The region-wide index was supported by a strong move in Europe’s largest tech company SAP. The software giant advanced 3.6% to $146.79 as Bank of America upgraded its rating to Buy from Underperform.
Stock gauges tracking individual economies in the old continent were mostly higher as Spain’s IBEX35 was the only major index that dipped in negative territory and ended the day lower by 0.07%. Germany’s DAX led the pack as the stock average climbed 1.17%, followed by UK’s FTSE100, up 0.71%. France’s CAC40 gained 0.31%.
Investors in Europe were held back from betting aggressively on so-called value stocks as mounting worries about the Delta variant of Covid-19 threatened to offset the economic recovery. To keep their portfolios aligned with the current market narrative, investors felt more comfortable rotating to growth stocks, which are seen as somewhat pandemic-resistant, while those focused on value are more vulnerable to economic stresses.
Growth across the EU is projected to expand by 4.8% this year, and 4.5% in the next one, according to comments from the European Commission yesterday. The fast recovery would be supported by a successful vaccination campaign and a return to business activity in the euro area.
“The EU economy is set to see its fastest growth in decades this year, fueled by strong demand both at home and globally and a swifter-than-expected reopening of services sectors since the spring,” said Paolo Gentiloni, the EU economics commissioner.
Economic Growth in the US
Wall Street rivals on the other end of the Atlantic pressed forward on Wednesday. The S&P500 and the Nasdaq Composite eked out fresh records, advancing 0.34%, and 0.01%, respectively. The tech-oriented Nasdaq Composite yesterday logged its fourth straight day of gains as technology companies remained robust ahead of the FOMC minutes of the most recent meeting.
The Fed’s publication encouraged investors to maintain their course in search of the best returns. Fed policymakers, according to the readout, have said they do not plan to unwind easy-money policies in the near future despite increasing inflation pressures. “The committee’s standard of substantial further progress was generally seen as not having yet been met, though participants expected progress to continue,” the minutes said.
In cryptocurrency action, Wednesday’s session brought moderate gains for Bitcoin. The number one digital currency added about 3% to its value and finished the session at $34,500. The orange coin has been
consolidated in the range of $32,000 to $36,000 for the past couple of weeks as crypto participants await the next big price catalyst.
Meanwhile, the highly contagious Delta variant is spreading quickly in the US. CDC data shows that the Indian strain has become the dominant Covid-19 variant sweeping across the states. The Delta variant made up 51.7% of all Covid-19 infections in the US in the two weeks ended July 3. The CDC is keeping up with May’s guidance that says fully vaccinated citizens do not need to wear masks indoors, despite the rapid spread of the more transmissible virus.