By Dave Morris
A fresh injection of liquidity by the Chinese central bank and positive expectations in Germany boosted markets Tuesday.
How did markets perform?
The Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP -2.90% was 0.3% higher at 389.3, following Monday’s close up 0.2%.
Germany’s DAX /zigman2/quotes/210597999/delayed DX:DAX -3.94% /zigman2/quotes/210223310/composite DAX -4.83% index led the major regional exchanges, rising 0.7% to 5,518 following after climbing 0.2% Monday.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.1459% ticked gently lower to $1.1292, down 0.1% following Monday’s flat close.
In Italy, the FTSE MIB /zigman2/quotes/210598024/delayed IT:I945 -2.97% was also higher at 21,965.1, adding 0.3% Tuesday to Monday’s gain of 0.2%.
France’s CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -4.30% was up 0.1% to 5,516.7, with animal spirits perhaps subdued by the catastrophic Notre Dame cathedral fire. It had also risen 0.1% Monday.
The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -3.83% rose 0.2% to 7,451.1 on Tuesday, after closing flat Monday.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.2264% was 0.1% lower at $1.3087, giving back Monday’s gain of 0.1%.
What’s moving the markets?
Investors were buoyed by positive signals on the global economy. China’s gross domestic product (GDP) will be the focus Wednesday, but Tuesday has its share of economic data points to keep an eye on. U.K. ILO unemployment was slightly better than expected, coming in at 3.9% for February versus analyst consensus of 4%. In Germany, however, the ZEW Economic Sentiment survey for April blew past expectations at 3.1%, as analysts were expecting 1.9%.
(Investors will also be monitoring U.S. industrial production and NAHB housing index figures, arriving Tuesday afternoon in Europe.)
Central bank action was the primary market driver following the Asia session. Minutes from the monetary policy meeting of the Reserve Bank of Australia’s board showed discussion of a potential rate cut on the horizon, if signs of a slowing economy emerged—namely if unemployment rose and inflation didn’t. Central bank the People’s Bank of China injected 40 billion yuan worth of liquidity into the markets after abstaining for 18 trading days, sending equities higher.
Which stocks are active?
Miners rallied as Rio Tinto PLC /zigman2/quotes/208934945/delayed UK:RIO -3.00% announced that it had marked down its 2019 target for iron ore production, shifting supply dynamics for the metal. Cyclones hitting operations in Australia’s Pilbara region were to blame. Rio was down 0.1%, while fellow iron ore miner Evraz PLC /zigman2/quotes/202291633/delayed UK:EVR -2.33% was up 1.8%.
German online retailer Zalando /zigman2/quotes/205496028/delayed DE:LHA -5.95% SE shares jumped 10.9% on the back of an announcement that its first quarter earnings would be above market expectations. According to the company, the January to March period is typically marked by discounting, so the earnings projection came as something of a surprise.
A profit warning by Deutsche Lufthansa AG /zigman2/quotes/209028521/delayed DE:ZAL -1.41% landed after market hours Monday night, saying its first quarter loss would be worse than it had originally predicted and that revenues were “down significantly”. After falling sharply, Lufthansa’s shares reversed and climbed 0.8%. That didn’t undo the damage to other European airline stocks, however. Airplane maker Airbus SE /zigman2/quotes/208224336/delayed FR:AIR -12.03% was down 0.4% and Dassault Aviation SA /zigman2/quotes/207053075/delayed FR:AM -3.00% dropped 0.5%.