Bangkok: Shares were mostly higher Tuesday in Europe and Asia after US stocks drifted to a mixed finish ahead of potentially market-moving events later in the week. Oil prices fell back after US Treasury Secretary Scott Bessent announced fresh sanctions against Iran and warned that countries persisting in doing business with the Islamic Republic would face retaliation.
Germany's DAX gained 0.5 per cent to 26,240.76 and the CAC 40 in Paris added 0.3 per cent to 8,480.52. Britain's FTSE 100 edged 0.1 per cent higher, to 10,869.93.
The future for the S&P 500 was up 0.3 per cent while that for the Dow Jones Industrial Average rose 0.2 per cent.
During Asian trading, Tokyo's Nikkei 225 gained 0.5 per cent to 65,856.43. Shares in technology investor SoftBank Group climbed 2.3 per cent. The Kospi in South Korea reversed early losses, gaining 0.7 per cent to 6,742.74 as traders resumed buying tech shares, snapping up bargains. Hong Kong's Hang Seng was nearly unchanged at 25,511.10, while the Shanghai Composite index picked up 0.2 per cent to 3,889.44.
In Australia, the S&P/ASX 200 gained 0.7 per cent to 9,164.60. Taiwan's Taiex jumped 0.9 per cent, while the Sensex in India lost 0.2 per cent. On Monday, areas of the bond market that the US Treasury Department has been trying to calm eased a bit, relieving pressure on stocks.
The S&P 500 slipped 0.3 per cent, while the Dow industrials added 0.3 per cent. The Nasdaq composite fell 0.8 per cent. Tech stocks led the decline. They've had big swings recently due to worries that the frenzy around artificial-intelligence technology has sent prices too high and huge demand for AI chips will falter if AI doesn't yield enough profits.
Chip giant Nvidia, a tremendous winner of the AI boom, lost 2.9 per cent on Monday. It will deliver its quarterly earnings report on Wednesday and that could dictate the next big move for AI-related stocks. Micron Technology lost 5.8 per cent and Broadcom fell 2.6 per cent. In the bond market, the yield of the 10-year Treasury eased to 4.69 per cent from 4.74 per cent late Friday, returning to where it was last week before the US Treasury Department announced a surprise move to increase the size of its planned buybacks of Treasurys.
Longer-term Treasury yields climbed through the summer on worries about high inflation, huge government debts and other factors. High yields make it more expensive for everyone to borrow, not just the government, and already have pushed up mortgage rates and hurt the housing industry.
“The latest discussion about using Treasury General Account cash to help finance purchases of longer-dated bonds gave the market something to chew on Monday, and it initially liked the taste. Long yields fell, and the curve flattened but there is a difference between forcing the bond market to blink for an afternoon and solving the underlying problem” Stephen Innes of SPI Asset Management said in a commentary.
The Federal Reserve's new chairman, Kevin Warsh, is set to deliver a speech Friday at an annual economic symposium in Jackson Hole, Wyoming, the backdrop for past policy announcements. Analysts say Warsh is likely to talk about inflation and how the Fed plans to deal with it.
Oil prices are a major factor behind higher costs and Brent crude, the international standard, has been trading above the $72 per barrel level it was at before the war with Iran began in late February. Early Tuesday, Brent crude fell 2 per cent to $88.74 per barrel. US benchmark crude oil shed 2.2 per cent to $83.14 per barrel.
Last month, Brent zigzagged between $72 and $102 as hopes rose and fell that the United States and Iran could reach a deal that would allow oil tankers to freely exit the Persian Gulf again. The new US sanctions announced Monday helped drag the value of Iran's currency, the rial, to a record low against the US dollar.
In other dealings, the US dollar rose to 159.30 Japanese yen from 159.10 yen. The euro was trading at $1.1670, up from $1.1667.