Most major equity indices across the globe rose higher today as the noise surrounding the current US-North Korea geopolitical tensions tempered. While the risk of a war between the two nations still exists, market participants believe that risk is not imminent. Equities in Europe followed Asian indices higher while US stocks also rose strongly after the market opened. At the same time, gold prices and the yen fell.
Heightened war of words that arose last week between the presidents of the US and North Korea induced a plunge among share prices globally. While no resolution has been found over the weekend, many officials urged the two parties to find a diplomatic solution, offering analyses that seem to have provided some calmness to the market. At the same time, the two presidents haven’t given any further public comments on the topic.
In the US, the Dow Jones rose half a percent, the S&P 500 was 0.60% higher while the NASDAQ Composite jumped 0.79% after the market opened.
In Europe, the pan-European STOXX 600 rose 0.86% while the blue-chip STOXX 50 index grew 0.76%. All sectors rose, with financials leading the gainers at both indices (up around 1.30%). Among individual banks, shares of Julius Baer and Commerzbank rose the most (up 3.43% and 3.16% respectively).
Among country indices, Spain’s IBEX rose the most, up 1.50%, followed by the Swiss SMI index. All other major bourses in Europe also rose during the day.
Fiat Chrysler’s share price rose 5.91%, the most across Europe, as rumors broke about potential Chinese bidders for the company. The company has not issued any official comments.
There was no respite for shares of Pandora, the jewelry maker, following last week’s disappointing results. Pandora’s stock fared the worst among the pan-European STOXX 600 companies by falling 3.71%. Some downgrades among brokers drove UDG Healthcare’s (down 3.27%) and Ladbrokes Coral Group’s (down 1.94%) share prices lower.
The share price of JD.com fell 0.41% after the market opened as the company announced worse profit loss than analysts forecasted amid higher marketing costs. Other companies of interest could be Tesla due to the company’s announcement late on Friday that the previously announced debt issuance of $1.50 billion will increase to $1.80 billion.
by Maja Rakic, XM Investment Research Desk