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Stocks Push Higher as Investors Track China, US Data

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Global stocks advanced on Tuesday as China’s growth reassurances and solid economic data in the United States helped reduce recession worries. online news

As investor anxiety over a global recession as well as political turmoil in Russia eased a little, haven currencies the dollar and yen pulled back while oil prices retreated.

“An encouraging speech from China’s Premier Li Qiang has lifted sentiment,” said Victoria Scholar, head of investment at Interactive Investor.

Li said China was on course to achieve its five-percent target for economic growth in 2023 set by Beijing earlier this year.

The world’s second-biggest economy is grappling with a slow recovery after emerging from Covid lockdowns.

In a fresh sign of optimism for China-US relations, reports said Treasury Secretary Janet Yellen planned to meet her counterpart in Beijing next month.

The talks would follow Secretary of State Antony Blinken’s trip to the country, where he spoke to his opposite number and President Xi Jinping.

A summit between Xi and President Joe Biden has also been flagged.

Meanwhile, a number of positive pieces of data boosted sentiment in the United States.

US consumer confidence surged unexpectedly to an 18-month high in June, fueled by an uptick in the outlook for family finances.

Meanwhile new home sales surged in May to reach the highest rate in over a year, while orders of big-ticket manufactured items rose again last month, fueled by a sharp jump in orders for transportation equipment.

The data defied expectations as the US Federal Reserve has been raising interest rates to slow the economy in the hopes of reducing inflation. While helping ease worries about the US economy falling into recession, the data may push the Fed to hike rates even further than it has been contemplating.

The Fed held rates steady earlier this month to better gauge the impact of its earlier rate hikes, but signaled further hikes are likely.

US Federal Reserve Chairman Jerome Powell is scheduled to speak at an annual central bank forum in Portugal on Wednesday. His comments will be keenly followed by investors looking for additional indications about rate hikes.

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The euro also got a boost from European Central Bank president Christine Lagarde, who said at the forum on Tuesday that it was “unlikely” policymakers could state soon when interest rates had peaked — and pledged yet another hike in July for the eurozone.

In Asian trading, Hong Kong and Shanghai stocks rose after Li’s speech boosted sentiment.

European stocks closed with modest gains, while Wall Street’s major indices were higher in late morning trading.

Oil prices fell further, with tensions over the political situation in Russia and its potential impact on supply outweighed by concerns that further interest rate hikes could depress demand.

“Increased chatter over the potential for further interest rate rises, this time from ECB policymakers and higher recession risk is helping to keep a lid on prices,” said analyst Michael Hewson at CMC Markets.

Key figures around 1530 GMT

New York – Dow: UP 0.4 percent at 33,858.03 points

London – FTSE 100: UP 0.1 percent at 7,461.46 (close)

Frankfurt – DAX: UP 0.2 percent at 15,846.86 (close)

Paris – CAC 40: UP 0.4 percent at 7,215.58 (close)

EURO STOXX 50: UP 0.6 percent at 4,305.26 (close)

Tokyo – Nikkei 225: DOWN 0.5 percent at 32,538.33 (close)

Hong Kong – Hang Seng Index: UP 1.9 percent at 19,148.13 (close)

Shanghai – Composite: UP 1.2 percent at 3,198.44 (close)

Euro/dollar: UP at $1.0955 from $1.0910 on Monday

Pound/dollar: UP at $1.2745 from $1.2714

Dollar/yen: UP at 144.07 from 143.50 yen

Euro/pound: UP at 85.95 pence from 85.78 pence

West Texas Intermediate: DOWN 0.9 percent at $68.73 per barrel

Brent North Sea crude: DOWN 0. percent at $73.60 per barrel


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