Mixed stocks worldwide, rising gold prices reaffirm conflicting economic outlooks
ALBAWABA – Gold prices picked up slightly on Wednesday, after sliding in earlier sessions, as stocks worldwide rebounded and risk appetite grew before United States (US) equities began sliding on mixed bag of expectations for major US tech-giants.
Stimuli introduced on Tuesday to boost China’s sluggish economic recovery also lifted Asian markets. But Chinese indexes soon started sliding in a signal that the measures introduced by the central government may not be enough.
Spot gold prices rose $3.24, or 0.16 percent, to $1,975.74 per ounce by 2:54 p.m. Amman time, after having slipped slightly in early sessions, according to GoldPrice.org.
Meanwhile, US equity-index futures dropped after Microsoft Corp. and Google’s parent Alphabet Inc. delivered a mixed picture of big tech earnings. Their results set the stage for other companies, whose reports are due to come in this week, according to Bloomberg.
Gold prices usually drop when stocks worldwide piGold prices ck up as stronger appetites for risk drive demand in the equities market - Shutterstock
Alphabet shares fell as much as 7 percent in premarket trading after its cloud unit reported smaller-than-expected profits, while Microsoft’s, on the other hand, climbed after results in its cloud business beat expectations.
Meanwhile, Texas Instruments Inc. dropped after a disappointing revenue forecast suggested that demand remains sluggish for a broad range of electronic components.
As a result, contracts on the Nasdaq 100 and the S&P 500 sank 0.6 percent and 0.4 percent.
US Treasuries held onto a bounce-back after the 10-year yield breached 5% on Monday, with the benchmark yield firm at 4.82%, Reuters reported.
Gold prices pick up as stocks worldwide gain on strong earnings, stimuli and risk appetite
Across the Pacific, Chinese stocks pared gains as initial excitement over Beijing’s fresh stimulus steps cooled, with traders seeing little relief for the troubled property sector.
The Hang Seng Tech Index gained 2.2%. Meanwhile, troubled Chinese developer Country Garden Holdings Co. was deemed to be in default on a dollar bond for the first time, amid the broader property-debt crisis that’s shaken China’s economy.
The CSI 300 Index closed 0.5 percent higher on Wednesday, losing more than half of earlier gains. The Hang Seng China Enterprises Index was up less than 1 percent, according to Bloomberg, after gaining more than 3 percent. Overall, the gauge was still on track to halt a four-day losing track.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6% after hitting its lowest since last November on Tuesday, Reuters reported, while Japan's Nikkei rose 1.2%.
China's blue-chip CSI300 index, which had been pinned near four-year lows, also rose 0.5%.
Stocks worldwide rebound on stimuli in China and earnings in the US tech sector despite higher gold prices - Shutterstock
The Shanghai Composite Index, as reported by Reuters, was also close to breaking through a critical 18-year trend line that had bolstered China’s economy during the trade war with the US and in the darkest moments of the pandemic. That trend line this time around is seen at around 2,900 points.
In Europe, the STOXX 600 added 0.44%, with declines in banking shares such as Barclays offset by gains in those of luxury group LVMH and Swiss computer parts maker Logitech, according to Reuters.
In the meantime, Frankfurt and Paris stocks both added around half of one percent ahead of Thursday's European Central Bank rate decision, Agence France-Presse (AFP) reported.
Outside of the EU, London edged up 0.2 percent to snap a four-day losing streak despite a survey showing shrinking private-sector business activity.
