US stocks recovered from a battering yesterday during the morning session as investors purchased assets that looked cheap after Monday’s falls.
All the US’ main benchmarks rose in the morning. The blue chip S&P 500 was up 1.12 per cent; the tech-heavy Nasdaq increased 0.73 per cent and the Dow Jones added 1.49 per cent.
The gains come after a day of losses across global markets as concerns that the rapid spread of the Delta variant of Covid could prompt policy makers to reintroduce restrictions on economic activity gathered momentum.
Anthony Minopoli, chief investment officer at Knights of Columbus Asset Advisors, said: “We have been in a straight line, almost straight up, and the market needs to shake it off once in a while. It (Delta variant) was an excuse to accelerate some selling yesterday.”
Market sentiment improved as investors turned towards a string of earnings reports set to be published over the coming weeks that are expected to be positive.
Yields on ten-year Treasuries fell to 1.17 per cent.
FTSE 100 rises to pare back heavy losses
London’s FTSE 100 rose on Tuesday to help pare back yesterday’s losses.
The capital’s premier index increased 0.39 per cent to 6,871 during the afternoon session. However, the index failed to breach the 7,000 mark, hitting an intra-day high of 6,929.
The gains helped to offset falls on Monday after investors pulled back from global equity markets due to fears that a sharp rise in Covid cases could slow the global economic recovery.
The FTSE 100 registered its largest single-day fall yesterday since May.
Russ Mould, AJ Bell investment director, said: “Investors appear to have taken the view that yesterday’s global markets sell-off was overdone and now it is time to buy some of the stocks worst hit.”
“This feels more like a dead cat bounce rather than a healthy rebound as all the arguments behind yesterday’s sell-off remain today. Inflation is still a major threat and there are plenty of reasons to expect the global economic recovery to slow down.”
The domestically-focused FTSE 250 gained 0.60 per cent, while AIM shares dropped 0.23 per cent.
The pound lost ground on the dollar, falling 0.47 per cent to buy $1.36.
Winners and losers
Housebuilder Berkeley Group was the day’s biggest winner, climbing 3.15 per cent, driven by investors forecasting demand in the UK housing market to run hot in the coming months.
Aerospace engineer Rolls Royce came second, up 3.05 per cent, while manufacturer Melrose came third, gaining 2.52 per cent.
Just Eat Takeaway.com was the morning’s worst performer, down 3.78 per cent, building on recent dips in the takeaway delivery firm’s share price.
Cybersecurity firm Avast was the second worst performer, falling 2.45 per cent, while miner Fresnillo slipped 1.77 per cent.
Around the world
Asian shares all fell sharply overnight, with all the region’s main benchmarks nursing heavy losses.
Japan’s Nikkei fell 0.96 per cent and Hong Kong’s Hang Seng dropped 0.72 per cent on concerns that a resurgence in Covid cases may be spiralling out of control.
European shares performed better – the Stoxx 600 was up one per cent this morning.