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Choppy trading: Markets gyrate as investors eye Mideast crisis, economic fears

World stock markets saw choppy trading Tuesday though Wall Street moved ahead in anticipation of a flood of strong corporate earnings, even as economic and geopolitical fears still dog sentiment ahead of this week’s eurozone interest rate decision.

Volatile US Treasury yields had affected stock trading Monday in the US, where some indexes rebounded after a sluggish start but the S&P 500 fell to its lowest close since May.

That uncertainty transferred to the Asian trading day with both Hong Kong and Tokyo trading down before the Nikkei 225 staged a late recovery at the close, though the Hang Seng Index still ended lower.

But the Dow added around 0.5 percent on opening and the tech-heavy Nasdaq and the S&P both added 0.7 percent ahead of a welter of earnings notably in the tech sector, while General Motors saw third-quarter profits top estimates on strong sales and a limited impact from a workers’ strike launched five weeks ago.

In Europe, Frankfurt and Paris stocks rose slightly before Thursday’s European Central Bank rate decision, but London edged down after a survey showed shrinking private-sector business activity.

The ECB has lifted its key rates 10 times since July last year to tame surging inflation, though policymakers are expected to pause the tightening campaign this week.

Looking at prospective earnings, Fawad Razaqzada, an analyst at Stone X, said “tech giants are expected to deliver better profits” but “the bar is set high, and it wouldn’t take much to disappoint expectations”.

– ‘Apprehension and anxiety’ –

“Trading has been very choppy at the start of the week — there’s clearly a lot of apprehension and anxiety in the markets which is keeping investors on their toes,” OANDA analyst Craig Erlam told AFP.

“This week, we have the ECB, big US tech earnings and inflation figures which may be playing a role. Events in Israel and Gaza are also a huge source of uncertainty which appears to be contributing to the mood,” he said.

Rising US bond yields have meanwhile increased worries that Federal Reserve interest rates will stay higher for longer, denting the growth outlook.

The yield on the 10-year US Treasury note had topped five percent for the first time in 16 years on Monday, a sign of potential recession fears, but moved lower later in the day.

In Asia, late bargain-hunting saw Tokyo end in positive territory, as did Seoul, Taipei, Jakarta, Singapore and Sydney, but Hong Kong slid back 1.1 percent.

Oil edged down after an earlier rebound, after taking a hammering on Monday on supply fears linked to violence in the crude-rich Middle East.

Bitcoin meanwhile soared to cross $35,000 for the first time since May last year.

The surge was caused by “growing exhilaration among investors regarding the potential approval of a bitcoin exchange-traded fund”, said Stephen Innes of SPI Asset Management.

– Key figures around 1400 GMT –

New York – Dow: UP 0.5 percent at 33,118.41 points

London – FTSE 100: DOWN 0.1 percent at 7,364.64

Frankfurt – DAX: UP 0.2 percent at 14,828.49

Paris – CAC 40: UP 0.4 percent at 6,878.37

EURO STOXX 50: UP 0.5 percent at 4,062.65

Hong Kong – Hang Seng Index: DOWN 1.1 percent at 16,991.53 (close)

Tokyo – Nikkei 225: UP 0.2 percent at 31,062.35 (close)

Shanghai – Composite: UP 0.8 percent at 2,962.24 (close)

Euro/dollar: DOWN at $1.0618 from $1.0644 on Monday

Pound/dollar: DOWN at $1.2198 from $1.2248

Dollar/yen: UP at 149.84 yen from 149.63 yen

Euro/pound: UP at 87.05 pence from 86.90 pence

Brent North Sea crude: DOWN 0.1 percent at $89.77 per barrel

West Texas Intermediate: DOWN 0.2 percent at $85.31 per barrel

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