Wall Street opens higher, following broad gains overseas

By: |
September 15, 2020 9:11 PM

Global stock markets mostly rose on Tuesday as economic data in China and Germany improved and investors looked ahead to a policy meeting by the US Federal Reserve. Shares in major European and Asian markets rose though Tokyo closed slightly lower.

U.S. Stocks, retail trading, Wall Street, algorithmic funds, equity, algorithmic fundsThe booming day-trading flows of late could have had an impact many times larger than their absolute size.

Stocks are opening higher on Wall Street, building on gains made over the previous two days. The S&P 500 was up 0.9 per cent early Tuesday. Markets were also higher overseas following encouraging economic reports from China and Germany. Traders will be watching Apple, which is set to announce updates to its iPad and smartwatch later in the day. The Federal Reserve will also be in focus as it starts a two-day policy meeting. It’s the first gathering since the Fed revised its operating framework in ways that will likely keep short-term interest rates near zero for years to come.

Global stock markets mostly rose on Tuesday as economic data in China and Germany improved and investors looked ahead to a policy meeting by the US Federal Reserve. Shares in major European and Asian markets rose though Tokyo closed slightly lower.

On Wall Street, futures for the Dow and the S&P 500 were both 0.7 per cent higher, suggesting the US market will add to the previous day’s gains. The Shanghai Composite Index gained 0.5 per cent to 3,295.68 after new figures showed that retail sales in the world’s second biggest economy rose 0.5 per cent in August over a year earlier for their first positive growth this year.

The Chinese statistics agency cited it as a sign of ‘stable and continuous’ economic recovery. In Europe, sentiment got a further boost by a rise in the German ZEW index of economic confidence in September. The DAX in Frankfurt rose 0.3 per cent to 13,236.

The CAC 40 in France rose 0.5 per cent to 5,076, while the FTSE 100 in London gained 1 per cent to 6,089. The Nikkei 225 in Tokyo fell 0.4 per cent to 23,454.89 while the Hang Seng in Hong Kong added 0.4 per cent to 24,734.71. The S&P-ASX 200 in Sydney was down less than 0.1 per cent at 5,894.50.

India’s Sensex advanced 0.4 per cent to 38,903.72. Singapore and Bangkok gained while New Zealand and Jakarta retreated. Tech stocks remain in focus after days of volatility. They rose Monday after Nvidia agreed to buy Softbank’s stake in chipmaker Arm Holdings for USD 40 billion.

Oracle climbed 4.3 per cent after the software maker beat out Microsoft to become the ‘trusted technology provider’ of Chinese-owned video app TikTok. The deal requires approval from the Trump administration, which deemed TikTok a security risk and demanded its sale to a US owner.

In other deals, Gilead agreed to buy Immunomedics for USD 21 billion. Verizon purchased Tracfone for USD 6.25 billion and Alibaba invested USD 4 billion in Grab. Looking ahead, investors will be watching the meeting of Federal Reserve policymakers this week, the first since they significantly revised the Fed’s operating framework in ways that will likely keep short-term interest rates near zero for years to come.

The focus will be on the statement that Fed policymakers release Wednesday and on the quarterly economic projections, which will for the first time include estimates for growth, unemployment and the Fed’s benchmark interest rate for 2023.

In energy markets, benchmark US crude oil for October delivery rose 59 cents to USD 37.85 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 7 cents on Monday to USD 32.26. Brent crude oil for November delivery gained 50 cents to USD 40.11 per barrel in London. The contract dropped 22 cents in the previous session to USD 39.61. The dollar edged down to 105.54 yen from Monday’s 105.72 yen. The euro rose to USD 1.1893 from USD 1.1865.

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