Daily market review

United States

Major stock indexes seesawed higher Thursday to extend the week's good gains with support from positive earnings. Sectors were mixed with energy and materials outperforming. The Dow Jones industrial average and the S&P 500 both gained 1.2 percent and the NASDAQ rose 1.3 percent.

Energy stocks led the winners on a recovery in oil prices after headlines suggesting the market's hopes for a near-term breakthrough in Russia-Ukraine talks were overdone. Materials benefited as a second day of strong gains in Chinese markets bolstered commodities prices. Health care and real estate outperformed too.

The FANMAG complex and tech stocks started weak but made a run higher late in the day, with Meta up 2.1 percent and Amazon up 2.7 percent. Homebuilders and retail showed strength. On the downside, travel & leisure, airlines, and restaurants gave back some recent gains.

Among retailers in focus, Ralph Lauren gained 4.7 percent and Signet Jewelers gained 7.0 percent on a revenues and margins beat. Dollar General gained 4.5 percent after raising its dividend and better guidance.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$9.44 to US$106.94 while spot gold rose US$7.70 to US$1936.61. The US dollar was weaker vs. major currencies. Yields on the US Treasury 30-year bond rose 4 basis points to 2.49 percent, and the 10-year note rose 2 basis points at 2.20 percent.


Equities were mixed on positive earnings news, offset by declining confidence about Russia-Ukraine negotiations. The Europe-wide STOXX 600 rose 0.5 percent, the German DAX eased 0.4 percent, the French CAC rose 0.4 percent, and the UK FTSE 100 was up 1.3 percent.

On the positive side, markets were bolstered by another rally in Chinese equities markets and news that Russia made an interest payment on its external debt to avoid default. UK markets outperformed after the Bank of England raised its base rate by an as-expected 25 basis points.

Oil & gas led the winners after crude oil surged again following a Kremlin spokesman's comment that a Financial Times report of significant progress in peace talks was "wrong."

Other rising sectors included food & beverage, construction & materials, health care, and real estate. Lagging were retail, autos & parts, banks, and travel & leisure. Rising oil prices and concerns about a rebound in Asian and European Covid cases weighed on travel with Carnival, the cruise line, down 1.8 percent.

Among companies in focus, Schoeller-Bleckmann, the oilfield servicer, gained 3.8 percent on an earnings and revenues beat. Among food & beverages, Diageo rose 2.8 percent on an upgrade at JP Morgan. On the downside, autos & parts were hurt by poor European new car registration figures. Retailers suffered as Ocado, the grocery delivery service, fell 8.2 percent after cutting its growth guidance for the post-Covid era and warning that inflation was hitting its profitability.

Asia Pacific

Asia-Pacific equities followed US equities higher after relatively soothing comments from Fed Chair Jerome Powell, hopes for progress on Ukraine, and on follow-through from Chinese official pledges on Wednesday to boost the economy.

Chinese equities improved sharply for a second day on expectations for more pro-growth government measures. The CSI 300 index rose 2.0 percent, the Shanghai composite gained 1.4 percent, and Hong Kong's Hang Seng index surged 7.0 percent. News lifted an array of sectors: property stocks gained after a report that Beijing would not press ahead with proposed property taxes; big tech advanced on expectations for easing in restrictions on overseas listings and a Financial Times report that China would aim to address US concerns over Chinese audit practices.

Japanese markets tracked US markets higher on rising optimism about Russia-Ukraine talks and as the weaker yen boosted exporters. The Nikkei 225 jumped 3.5 percent and the broader TOPIX rose 2.5 percent, with gains across the board. Precision instruments, machinery, electric appliances, and chemicals were among the day's top performers.

The Taiwan Taiex advanced 3.0 percent and the South Korean Kospi rose 1.3 percent with tech stocks best. The Indian BSE Sensex gained 1.8 percent with financials and real estate outperforming.

Hopes for Chinese economic stimulus lifted Australian equities and commodities prices. The All Ordinaries index rose 1.2 percent. Stronger than expected Australian employment figures boosted risk appetite too and ratcheted up pressure on the Reserve Bank of Australia to raise rates. Australian employment rose by 77,400 in February after an increase of 28,300 in January. The unemployment rate fell from 4.2 percent to 4.0 percent, its lowest level since 2008.

Looking ahead*

In Asia/Pacific, the Bank of Japan policy announcement and Japanese CPI figures are scheduled. In Europe, Eurozone merchandise trade and Italian merchandise trade figures are due. In North America Canadian retail sales, US existing home sales, and US leading indicators reports are on tap.

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