Stock markets struggled for direction Tuesday as investors weighed Chinese stimulus hopes, political tensions in France and the US interest-rate outlook.
Germany’s blue-chip DAX stock index jumped above 20,000 points for the first time and Paris rebounded even as France braced for new political turmoil.
The euro also bounced back against the dollar, which was pressured by expectations that the Federal Reserve will once more cut US interest rates this month.
Opposition lawmakers in France prepared to back a no-confidence motion this week that risks toppling the government of Prime Minister Michel Barnier after just three months in office.
The standoff between Barnier and the opposition is over France’s 2025 budget, which has caused jitters on financial markets.
Wall Street opened mixed, a day after setting more record highs amid strong US holiday sales and as traders assessed Washington’s decision to impose fresh tech export restrictions on Beijing.
Briefing.com analyst Patrick O’Hare said there was a lack of a strong conviction to either buy or sell stocks as the S&P 500 and tech-heavy Nasdaq dipped from record closing highs.
Investors are “mindful that the big rally since the (US) election presents a valid reason to think there could be — or should be — a consolidation period,” said O’Hare.
But “by and large, there is an allowance to think the market can continue to move higher with momentum, a seasonal bias, and a fear of missing out on further gains… but participants are going to wait on the price action to be the determinant,” he added.
The trading day got off on the right foot Tuesday after a Bloomberg report said that China’s top leaders, including President Xi Jinping, would hold a two-day economic work conference next week to outline their targets and stimulus plans for next year.
The report followed manufacturing activity data on Monday that suggested China’s economic struggles may be coming to an end, but investors are looking for Beijing to step up support for the economy.
The news helped push Hong Kong and Shanghai stock markets higher despite Washington announcing new export restrictions taking aim at Beijing’s ability to make advanced semiconductors.
The moves step up existing US efforts to tighten curbs on exports of state-of-the-art AI chips to China.
Beijing hit back by saying it would restrict exports to the United States of some key components in making semiconductors.
Investors remain wary about the prospect of a second term for Donald Trump as US president, particularly after his pledge to hit China, Canada and Mexico with heavy tariffs.
Oil prices rose more than one percent ahead of a meeting Thursday of members of the OPEC oil cartel and its allies.
“The forecast is that they will announce an extension until the end of the first quarter of 2025, and this should help put a floor under prices,” said Trade Nation analyst David Morrison.
China stimulus measures would also help boost growth in oil demand in China, which has been flagging.
– Key figures around 1430 GMT –
New York – Dow: UP 0.2 percent at 44,851.64 points
New York – S&P 500: FLAT at 6,045.55
New York – Nasdaq Composite: DOWN 0.3 percent at 19,350.21
London – FTSE 100: UP 0.8 percent at 8,376.74
Paris – CAC 40: UP 0.1 percent at 7,245.71
Frankfurt – DAX: UP less than 0.1 percent at 19,942.57
Tokyo – Nikkei 225: UP 1.9 percent at 39,248.86 (close)
Hong Kong – Hang Seng Index: UP 1.0 percent at 19,746.32 (close)
Shanghai – Composite: UP 0.4 percent at 3,378.81 (close)
Euro/dollar: UP at $1.0529 from $1.0499 on Monday
Pound/dollar: UP at $1.2668 from $1.2654
Dollar/yen: DOWN at 148.86 yen from 149.54 yen
Euro/pound: UP at 83.11 from 82.97 pence
Brent North Sea Crude: UP 1.5 percent at $72.91 per barrel
West Texas Intermediate: UP 1.6 percent at $69.16 per barrel
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