European shares paused around a record high after six weeks of gains, as investors waited for reassurance that central banks are on track to cut interest rates in the coming months.
The pan-European Stoxx 600 gauge rose 0.1%, though the tech shares subindex outperformed, tracking Friday’s Wall Street tech rally. Treasury yields edged up, while oil prices steadied near the highest level this year after OPEC+ extended its production cuts.
Earlier in Asia, the world’s top chipmaker Taiwan Semiconductor Manufacturing Co. rose to its highest-ever level and Japan’s Nikkei-225 index surpassed 40,000 for the first time. US stock futures held around flat, after the S&P 500 notched its 15th record high Friday, led by megacap tech shares such as Nvidia Corp.(NASDAQ: NVDA) and Advanced Micro Devices Inc.
The US personal consumption expenditures index last week reinforced bets the Federal Reserve would be able to cut rates later this year, while the latest earnings season showed companies averaging 8% earnings growth.
“Better economic outlook, bullish investor sentiment and some better earnings have supported the equity markets,” Jefferies strategist Mohit Kumar wrote in a note. “Whether it’s the economic outlook or the central bank ‘put’ being back on the table, investors are very positive on risky assets.”
While markets have broadly pushed policy-easing expectations to July, from the previously anticipated May, Kumar still expects 75-100 basis points worth of rate cuts this year from the Fed.
Some hints could come this week from Fed Chair Jerome Powell’s congressional testimony, while the European Central Bank will hold a policy meeting on Thursday. A raft of economic data is also due, including US monthly payroll figures on Friday.
Elsewhere, Chinese stocks eked out meagre gains as traders waited for the 14th National People’s Congress, an annual parliamentary gathering that will begin Tuesday and could produce more stimulus measures to shore up the economy.
Potential policy support from the NPC, alongside likely 8-10% earnings growth, meant there was “a pretty good setup for the market to do better in the next 10-12 months,” Kinger Lau, a strategist at Goldman Sachs Group Inc., said on Bloomberg Television.
Elsewhere, Bitcoin topped $65,000 level, leading traders to bet the cryptocurrency will surpass the record price of almost $69,000, hit during the pandemic.
Source: https://finance.yahoo.com/news/asia-stocks-eye-early-gains-222128616.html
