European stocks rally as traders seek temporary relief from crisis management

Positive economic news boosts markets and the US dollar as traders look beyond the Middle East crisis


Markets returned to some semblance of normality on Tuesday as the lull in US-Iran brinkmanship allowed traders to focus on more mundane concerns – if only temporarily.

In Europe the German Dax recovered a large chunk of yesterday’s losses.

Decent eurozone inflation and retail sales figures spread positive sentiment among traders. The Dax was up 0.83 per cent at 3pm GMT, finally settling at 13,226.83, a 0.76 per cent rise for the day.

London’s FTSE 100 was largely flat, ending the day on 7,573.85, down 1.49 or 0.02 per cent.

That was perhaps to be expected on a day of contrasting fortunes for British carmakers. While Rolls-Royce reported a 25 per cent sales surge in 2019, weak European demand for James Bond favourite Aston Martin forced the company to issue a profit warning.

Major US indices were all marginally in the red at 11am EST, despite figures showing the US trade deficit falling to a three-year low.

The Dow Jones had fallen 0.32 per cent in late morning trading, held down by healthcare and energy stocks, although an afternoon rally looked to be in the offing.

Oil futures fell as prospects of an immediate escalation of the crisis in the Middle East appeared to recede. Brent Crude prices had slumped 0.9 per cent by 4pm GMT, albeit from a high base.

Gold remained attractive to investors, although far fewer of them headed to the safe haven commodity compared to Monday’s stampede. It had advanced 0.18 per cent by later afternoon GMT.

Positive trade deficit news ensured a profitable session for the dollar. The greenback was up against a basket of currencies, posting a 0.53 per cent gain against the euro at 11am EST.

Bitcoin was also trading strongly, breaching the $7,800 mark by late morning EST, a rise of 0.89 per cent.

FURTHER READING: Aston Martin issues profit warning while Rolls-Royce and Bentley sales surge

FURTHER READING: Eurozone posts promising figure on inflation and retail sales

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