US, European shares climb but China tumbles on trade worries

Oil steadies as risks to supply prevent sell off

NEW YORK, April 17, (Agencies): US and European shares climbed on Tuesday, lifted by data, corporate results and a return to riskier investments, while many Asian equity markets were weighed down by China amid mixed economic reports and lingering trade fears.

Strong US earnings from Netflix, Goldman Sachs and healthcare companies boosted stock prices on Wall Street and optimism about what is expected to be the strongest earnings season in seven years.

Companies on the benchmark S&P 500 stock index are expected to report an 18.6 percent jump in firstquarter profit on average, according to Thomson Reuters data.

The Dow Jones Industrial Average rose 255.24 points, or 1.04 percent, to 24,828.28, the S&P 500 gained 28.48 points, or 1.06 percent, to 2,706.32 and the Nasdaq Composite added 115.92 points, or 1.62 percent, to 7,272.20.

MSCI’s gauge of stocks across the globe gained 0.74 percent.

European shares advanced, with the pan-European FTSEurofirst 300 index rising 0.91 percent and poised to close higher.

Germany’s Deutsche Boerse DAX index was last up 1.58 percent, despite fears of a trade war with the United States and the current tension in Syria pushing German investor morale to its lowest level in more than five years in April.

In China, stocks in Shanghai closed near a one-year low, after a US move to ban American companies from selling components to Chinese telecom equipment maker ZTE Corp hurt tech stocks.

Also weighing on the region was data showing March industrial output in China missed expectations and first-quarter fixed-asset investment growth slowed. However, China’s economy grew 6.8 percent in the first quarter of 2018 from a year earlier, unchanged from the previous quarter.

The country’s March retail sales also jumped over 10 percent, the strongest pace in four months.

MSCI’s broadest index of AsiaPacific shares outside Japan closed 0.36 percent lower, while Japan’s Nikkei rose 0.06 percent.

The euro fell slightly after rising above $1.24 to a three-week high on the Chinese data, ebbing Syria retaliation fears and overall renewed risk sentiment.

The dollar index rose 0.19 percent, with the euro down 0.25 percent to $1.2347.

Sterling was last at $1.4304, down 0.22 percent on the day, after hitting nearly $1.438, its highest since British voters decided in June 2016 to exit the European Union.

US sanctions on major Russian producer Rusal drove aluminium prices to almost $2,500 a tonne, their highest since mid 2011, before profit-taking reversed it all. Rusal accounts for 6-7 percent of global aluminium supply.

Oil prices steadied as investors took profit on last week’s rally and amid concern over the potential for supply disruptions.

US crude fell 0.32 percent to $66.01 per barrel and Brent was last at $71.20, down 0.31 percent on the day.

US stocks rose more than 1 percent on Tuesday, helped by gains in technology companies and as strong earnings from Netflix and UnitedHealth boosted optimism over what is expected to be the strongest earnings season in seven years.

Netflix shares rose as much as 9.3 percent to $336.25, hitting an alltime high, after the video-streaming pioneer smashed analysts’ quarterly subscriber estimates, helped by a blitz of original content.

UnitedHealth jumped 3.4 percent after the largest US health insurer raised its earnings forecast and posted results that beat Wall Street estimates.

Analysts expect profits of S&P 500 companies to rise 18.6 percent in the first quarter, the biggest increase in seven years, according to Thomson Reuters data.

At 11:33 am ET, the Dow Jones Industrial Average was up 1.05 percent at 24,830.11. The S&P 500 gained 1.1 percent to 2,706.4 and the Nasdaq Composite rose 1.62 percent to 7,272.30.

At their session highs, all three indexes were above their 50-day moving averages.

Data on Tuesday showed US homebuilding increased more than expected in March amid a rebound in the construction of multi-family housing units. The PHLX housing index rose 1.3 percent.

All the 11 major S&P sectors were higher, led by the technology index’s 1.91 percent gain. The consumer discretionary index rose 1.7 percent, boosted by Netflix and Amazon, which gained 2.7 percent.

Amazon.com is in talks with Brazilian airline Azul on shipping goods in the country, Latin America’s largest economy, Reuters reported.

Goldman Sachs reversed course to drop 0.9 percent, mirroring other big US banks that declined despite beating Wall Street’s profit expectations.

J&J fell 1.8 percent, erasing premarket gains after the company reported a better-than-expected profit and raised its full-year sales forecast.

The earnings season has helped divert attention from geopolitical and trade concerns, which have roiled the markets in recent months.

Advancing issues outnumbered decliners on the NYSE for a 3.23to-1 ratio, and on the Nasdaq, for a 2.98-to-1 ratio.

European shares rose on Tuesday to their highest since the end of February as sentiment on tensions between the US and Russia eased and attention shifted to deal-making and first-quarter earnings season.

The pan-regional STOXX 600 index rose 0.8 percent, while other European benchmarks also rose, boosted in afternoon trading by strong gains on Wall Street.

Italian banks rallied, up 1.7 percent after the country’s biggest lender, Intesa Sanpaolo, agreed a sale of bad loans that investors said could help other banks to achieve better terms and boost lending.

Shares in Sweden’s Intrum Justitia, which bought Intesa’s loans, rose 8 percent.

Elsewhere, AB Foods advanced by 4.1 percent after meeting results expectations with a resilient performance at its Primark fashion business and a previously flagged reduction in sugar revenues.

Casino rose 1.3 percent after the French supermarket chain reported a 3.1 percent rise in first-quarter sales that reflected stronger performance in its Geant Casino hypermarkets and in Brazil despite food inflation.

Sanofi firmed by 0.6 percent after the French healthcare group announced exclusive talks to sell its Zentiva European generics drugs arm to private equity firm Advent Internationalfor 1.9 billion euros ($2.4 billion).

Still on the French M&A front, Lagardere, the French media group with assets including Paris Match magazine and Europe 1 radio, rose 1.2 percent after it said it would sell some eastern European radio assets to Czech Media Invest.

Asian markets failed Tuesday to hold on to early gains following news that China’s economy grew more than expected in the first three months, with trade and geopolitical tensions still dogging sentiment.

Hong Kong and China ended down after fluctuating through the morning on data showing the world’s number two economy expanded in January-March at the same rate as the previous three months.

Hong Kong fell 0.8 percent and Shanghai finished down 1.4 percent. Sydney, where a number of firms that rely on Chinese business are based, was flat, but Singapore added 0.2 percent.

Tokyo closed slightly higher while Seoul eased 0.2 percent, Wellington dipped 0.7 percent and Taipei fell more than one percent.

Markets in Asia fell Monday after a US-led attack on alleged chemical weapons facilities in Syria, in response to what the Western allies say was a toxic gas attack by the Russia-backed regime.

In early European trade London rose 0.2 percent, Paris added 0.3 percent and Frankfurt gained 0.4 percent.

■ Key figures around 0820 GMT Tokyo — Nikkei 225: Up 0.1 percent at 21,847.59 (close)

Hong Kong — Hang Seng: Down 0.8 percent at 30,062.75 (close)

Shanghai — Composite: Down 1.4 percent at 3,066.80 (close)

Dollar/yen: Down at 106.95 yen from 107.11

Oil steadied on Tuesday as investors took profit on last week’s rally above three-year highs, with prices supported by growing concern over the potential for supply disruptions.

Brent crude oil futures were up 11 cents at $71.53 a barrel by 1418 GMT, having come off an earlier high of $71.89, while US crude futures were largely flat at $66.19.

Brent has risen 1.5 percent so far this month. It hit a peak of $73.09, the highest since late 2014, on mounting tensions in the Middle East, the possibility of renewed US sanctions against Iran and falling output in Venezuela, where economic crisis has cut oil output to multi-year lows.

Gold fell on Tuesday as sharper appetite for risk benefited cyclical assets at bullion’s expense, with the dollar’s recovery from three-week lows versus the euro adding to pressure on the metal.

Gold rallied to a 2-1/2 month high last week as heightened tensions over Syria and US sanctions on Russia sparked a drop in equities and ratcheted up interest in nominally defensive assets. Those gains, however, have proved hard to maintain.

Spot gold was down 0.4 percent at $1,341.23 an ounce at 1350 GMT, while US gold futures were down 0.5 percent at $1,343.80.