Stocks in Europe climbed Tuesday as China’s pledge to boost monetary-policy support for its Covid-hit economy lifted sentiment, while traders also eyed a raft of earnings reports from some of the region’s biggest companies.

The Stoxx 600 Europe rebounded from a six-week low, with Novartis AG and UBS Group AG among the biggest index movers after positive first-quarter reports. Basic resources led the advance, buoyed by earnings beats from paper maker UPM-Kymmene Oyj and ball-bearing manufacturer SKF AB. HSBC Holdings Plc dropped after saying additional share buybacks were unlikely this year following a decline in a key measure of capital strength.

U.S. equity futures dipped following Monday’s choppy close higher before big-tech earnings. Twitter Inc. edged higher in premarket trading after Elon Musk offered to buy the social-media platform, though the share price stayed below the offer of $54.20 per share. Treasury yields fell and the dollar was steady. Crude oil retreated.

Aside from vowing more assistance, the People’s Bank of China also said it will promote healthy and stable development in financial markets. Most of Beijing is being tested for the virus, fanning fears of an unprecedented lockdown there that could drag on global growth as the Federal Reserve and other central banks tighten policy. 

The prospect of slower economic expansion alongside persistent inflation is leading to a febrile mood in markets. The panoply of risks spans the pandemic, supply-chain disruptions, Fed tightening and Russia’s grinding war in Ukraine. The search for portfolio buffers in the U.S. is evident in the highest relative cost of loss-protecting put contracts in two years.

“It’s a question of what’s monetary policy going to look like and it’s super unknown,” Nancy Davis, chief investment officer at Quadratic Capital Management LLC, said on Bloomberg Television.

An Asia-Pacific equity index eked out a climb for the first time in four sessions amid a 3% jump in technology shares in Hong Kong. Mainland Chinese bourses dipped but avoided the kind of plunge witnessed Monday. The offshore yuan and a dollar gauge were both little changed, while the yen pushed higher amid short covering.

U.S. corporate earnings are providing some solace for equity bulls — close to 80% of firms have beaten profit expectations. Alphabet Inc., Apple Inc., Amazon.com Inc. and Meta Platforms Inc. are all due to report later this week.

“It’s a huge week for U.S. earnings,” Chris Weston, head of research at Pepperstone Financial Pty, wrote in a note. While “China is the elephant in the room,” earnings matter and risk sentiment could firm up, he said.

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Events to watch this week:

• Tech earnings include Alphabet, Meta Platforms, Amazon, Apple
• EIA oil inventory report, Wednesday
• Australia CPI, Wednesday
• Bank of Japan monetary policy decision, Thursday
• U.S. 1Q GDP, weekly jobless claims, Thursday
• ECB publishes its economic bulletin, Thursday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.9% as of 10:33 a.m. London time
• Futures on the S&P 500 fell 0.2%
• Futures on the Nasdaq 100 fell 0.2%
• Futures on the Dow Jones Industrial Average fell 0.3%
• The MSCI Asia Pacific Index rose 0.3%
• The MSCI Emerging Markets Index rose 0.8%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro fell 0.2% to $1.0695
• The Japanese yen rose 0.3% to 127.72 per dollar
• The offshore yuan was little changed at 6.5692 per dollar
• The British pound fell 0.2% to $1.2715

Bonds

• The yield on 10-year Treasuries declined three basis points to 2.79%
• Germany’s 10-year yield declined one basis point to 0.83%
• Britain’s 10-year yield was little changed at 1.84%

Commodities

• Brent crude fell 1.1% to $101.24 a barrel
• Spot gold rose 0.3% to $1,903.98 an ounce

Source by: bloomberg