By Samuel Indyk and Kevin Buckland
LONDON (Reuters) -Global equities rose on Thursday, with Japanese shares hitting a record high, as upbeat earnings, growing hopes for a ceasefire in Ukraine and expectations for U.S. rate cuts boosted sentiment.
Markets largely shook off U.S. President Donald Trump’s latest tariff volleys, including an additional 25% tariff on U.S. imports from India over purchases of Russian oil and a threatened 100% duty on U.S. imports of chips.
“It’s surprising that everything that gets thrown at the market that it just continues to melt-up,” said Eddie Kennedy, head of bespoke discretionary fund management at Marlborough.
Europe’s STOXX 600 rose 1%, with major indexes in Frankfurt and Paris up 1.7% and 1.3%, respectively. Britain’s FTSE 100 was the outlier, dropping 0.8% after the Bank of England lowered interest rates but in a split vote, with four voting to keep rates unchanged.
Plans for a meeting between U.S. President Trump and Russian President Vladimir Putin over the war in Ukraine also helped sentiment in European equities and underpinned the euro.
“It (a ceasefire) would be an extra positive,” said Emmanuel Cau, Barclays head of European equity strategy.
“If there is a de-escalation, it would clearly be supportive. It’s not the key driver but it’s definitely been a lingering issue for Europe.”
U.S. S&P 500 futures rose 0.7%. On Wednesday, the cash index climbed 0.7%.
“Wall Street seems to have gotten its mojo back,” Capital.com analyst Kyle Rodda wrote in a note.
“However, there are persistent risks to the downside. Downside surprises in official data are increasing,” he said. “Valuations are also stretched, with forward price to earnings hovering around the highest in four years. And trade uncertainty persists.”
In Asia, Japan’s broad Topix index rose 0.7% to a record closing high, with the more tech-focused Nikkei also gaining by about the same.
Taiwan’s stock benchmark jumped as much as 2.6% to a more than one-year peak. Shares in chipmaker TSMC, which this year announced additional investment in its U.S. production facilities and so is expected to be relatively unscathed by the U.S. tariff on imported chips, soared 4.9% to a record high.
The KOSPI added 0.9%, with South Korea’s top trade envoy saying Samsung Electronics and SK Hynix would not be subject to 100% tariffs.
Hong Kong’s Hang Seng rose 0.7%, although mainland Chinese blue chips were only slightly higher on the day. The yuan firmed slightly to 7.1832 per dollar in offshore trading.
DOLLAR STEADY, STERLING JUMPS AFTER BOE
The U.S. dollar was steady against major peers after its recent fall on expectations of easier policy from the Federal Reserve, stoked both by some disappointing macroeconomic data – not least Friday’s payrolls report – and Trump’s move to install new picks on the Fed board that are likely to share the U.S. President’s dovish views on monetary policy.
Focus is centring on Trump’s nomination to fill a coming vacancy on the Fed’s Board of Governors and candidates for the next chair of the central bank, with current Chair Jerome Powell’s tenure due to end in May.
The benchmark 10-year U.S. Treasury yield was up 1.5 basis points at 4.2461%. The two-year yield, which is more sensitive to changes in interest rate expectations, was up 2 basis point at 3.7258%, but remained close to a three-month low of 3.659% touched on Monday.
The dollar index, which gauges the currency against the euro, sterling and four other counterparts, eased 0.2% to 98.031, extending a 0.6% drop from Wednesday.
The euro was flat at $1.1653, following the previous session’s 0.7% jump.
Sterling rose 0.5% to $1.3412 after a highly-divided decision by the BoE to lower interest rates.
Four of the nine rate-setters on the Monetary Policy Committee, worried about inflation, voted to keep rates unchanged.
“The vote split is clearly a lot more hawkish than I was expecting,” said Dominic Bunning, head of G10 FX strategy at Nomura.
In commodities, spot gold added 0.3% to $3,376 an ounce, after earlier hitting its highest level in two weeks.
Crude oil prices snapped five days of losses although trimmed some of the earlier gains after the Kremlin said Trump and Putin were to meet.
Brent crude futures were up 0.6%, at $67.29 a barrel while U.S. West Texas Intermediate crude gained 0.6% to $64.73.
(Reporting by Samuel Indyk and Kevin Buckland; Editing by Lincoln Feast, Alex Richardson and Susan Fenton)
