By Amanda Cooper and Chibuike Oguh
LONDON/NEW YORK (Reuters) -An index of global shares held steady on Monday as investors weighed President Joe Biden’s decision to end his re-election bid this weekend, while a surprise interest rate cut by China’s central bank failed to lift Asia’s stimulate markets.
Biden announced on Sunday he would withdraw from the US presidential election and endorsed Vice President Kamala Harris for the Democratic ticket to challenge former President Donald Trump, the Republican candidate.
Markets immediately absorbed the news, with MSCI’s share index around the world rising 0.75% to 816.92. The index fell 2.1% last week, its worst weekly performance since April.
“I think Biden’s bailout was largely priced in; we just needed certainty about that,” said Lou Basenese, president and chief market strategist at MDB Capital in New York. “Now you see the Trump trades, more risk taking, small caps, going long oil and gas, and Bitcoin really coming back to the market,” he added.
The dollar was slightly higher against a basket of currencies, capturing some safe-haven flows, while bitcoin – which tends to benefit from growing chances of a Trump return to the White House – held steady after falling following the fall on Sunday from Biden. announcement.
Yields rose 0.1% to 104.32, while the euro rose 0.07% to $1.0885. , which hit a six-week high last week in the strongest weekly rally since February, traded at a more even level on Monday, up 1.76% to $68,158.
On Wall Street, all three major indexes finished higher, led by gains in technology and communications services stocks. Nvidia (NASDAQ:) ended up almost 5%, buoyed by news that it is working on a new AI chip for the Chinese market.
They rose 0.32% to 40,415.44, rose 1.08% to 5,564.41 and rose 1.58% to 18,007.57.
Investors will be looking forward to a busy week of corporate earnings. Tesla (NASDAQ:) and Google parent Alphabet (NASDAQ:) are kicking off the season for the “Magnificent Seven” mega-cap stock group.
US Treasuries were little changed as markets assessed uncertainty surrounding the race for the White House, with US 10-year benchmark bond yields rising 1.7 basis points to 4.256%. Markets are pricing in the prospect of a Federal Reserve rate cut in September, which has helped support risk appetite.
“President Biden’s withdrawal from the race, I don’t think, will have any impact on the market because whether it’s Kamala Harris or anyone else, the policies will be the same,” said David Spika, chief market strategist. at Turtle Creek Wealth Advisors in Dallas.
“The market is growing today because big tech is back. We’ve seen a rotation from the big tech names to small caps, values and cyclicals for a few weeks in a row, which has actually been very healthy,” he added.
Europe’s biggest banks are also reporting this week, asking whether gains from higher interest rates have been used up and whether the recent political drama is weighing on sentiment. The final increase is 0.93%.
The People’s Bank of China cut short-term interest rates by 10 basis points, lowering long-term borrowing costs and bond yields. The move follows Beijing’s publication of a policy paper on Sunday outlining its ambitions for the economy. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.61%.
Oil prices fell for the second straight session due to rising inventories and signs of weak demand. futures fell 0.3% to settle at $82.40 a barrel, the lowest since June 11. US West Texas Intermediate crude futures for August delivery expired on Monday after falling 35 cents to $79.78 a barrel, also a one-month low.
The gold price fell to the lowest level in more than a week. lost 0.07% to $2,398.32 an ounce. The US gained 0.28% to $2,402.10 an ounce.
