World stocks power on as sterling halts slide

The pound stemmed its decline against the dollar and euro after key resignations from the British government over Brexit hammered the currency. — AFP pic
The pound stemmed its decline against the dollar and euro after key resignations from the British government over Brexit hammered the currency. — AFP pic

NEW YORK, July 11 — Global stock markets mostly rose yesterday with investors feeling optimistic about the upcoming corporate results season, especially in the United States.

rose for the fourth straight session, with investors casting aside worries about trade conflicts to focus on forecasts for year-over-year profits in energy and other sectors.

The pound stemmed its decline against the dollar and euro after key resignations from the British government over Brexit hammered the currency.

“With the prospect of a positive earnings’ season ahead of us, investors seem to have forgotten the threat of further trade tensions,” said Konstantinos Anthis, head of research at ADSS.



According to the FactSet data provider, S&P 500 company earnings are expected to grow 20 per cent in the second quarter.

But when adding in “the potential for positive surprises,” growth could well exceed 23 per cent, said Hussein Sayed, chief market strategist at FXTM.

Sterling creeps back

The pound remained under pressure but managed small gains, one day after Brexit divisions sparked the shock resignations of two senior ministers including Foreign Secretary Boris Johnson.

Both Johnson and Brexit minister David Davis quit Monday in a heavy blow to Prime Minister Theresa May’s authority — and her plan for leaving the European Union.

The news sparked speculation of a potential leadership challenge and the threat of another general election.

“Theresa May defiantly stood her ground on Monday,” said Jasper Lawler, analyst at London Capital Group.

“With threats of a vote of no confidence unfounded, she lives to fight another day as prime minister…(and) the pound managed to pick itself up.”



But the market remains nervous about any signs of a leadership challenge to May, said XTB analyst David Cheetham.

“Should one occur, and be successful, then there is the potential for further declines in sterling,” he said.

Stocks climb

Back in stock markets, Europe followed most of Asia higher after another strong lead from New York on Monday.

Frankfurt’s gains came despite a gloomy ZEW survey showing that German investor confidence had plunged sharply in July.

US earnings season gets started in earnest on Friday with reports from large banks. But PepsiCo surged nearly five per cent after reporting better-than-expected results that also lifted other consumer shares.

Oil prices rose, partly on expectations of US sanctions on key producer Iran and ongoing political and economic turmoil in Venezuela.

Traders were also watching Norwegian after strike action at Shell facilities in the North Sea prompted the first outages. — AFP



Source: The Malay Mail Online






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