Wall Street shares gain as Big Tech rallies

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Wall Street shares gained on Tuesday, driven by a rally in big technology stocks, while the prospect of further interest rate rises dented markets in Europe.

Wall Street’s tech-focused Nasdaq Composite gained 0.5 per cent, rebounding from two successive down days, while the benchmark S&P 500 added 0.3 per cent. Tech heavyweights including Tesla, Amazon and Nvidia all gained about 1 per cent.

The moves came as traders grappled with the idea that global central banks were set to lift interest rates higher this year, growing concerned that high borrowing costs could bring about an economic downturn.

In Europe, the region-wide Stoxx 600 was 0.4 per cent lower after European Central Bank president Christine Lagarde said its “job is not done”, signalling another eurozone rate increase in July. Germany’s Dax and France’s Cac 40 lost 0.2 per cent.

Eurozone inflation figures due on Friday are expected to show that price growth slowed to 5.7 per cent in the year to June, down from 6.1 per cent a month earlier, according to economists polled by Reuters.

Yet the ECB is likely to remain concerned over the region’s underlying price pressures. Core inflation, which strips out volatile food and energy prices, is expected to have accelerated, necessitating further tightening.

The ECB in June raised its benchmark deposit rate by a quarter point to 3.5 per cent, its highest level in 22 years.

Oil prices fell, further puncturing a shortlived rally after the weekend’s armed mutiny in Russia raised serious questions about the outlook for President Vladimir Putin’s regime and doubts over crude output from one of the world’s top suppliers.

International benchmark Brent crude traded 0.9 per cent lower at $73.51 a barrel while US marker West Texas Intermediate was down 1 per cent at $68.63.

In China, equity markets were up, with Hong Kong’s Hang Seng index rising 1.9 per cent and China’s CSI 300 gaining 0.9 per cent.

Investors welcomed the assurance that China’s officials intended to support growth in the world’s second-largest economy, which has struggled to pick up steam this year since reopening after the pandemic.

China’s premier Li Qiang gave a speech at the World Economic Forum’s Annual Meeting of the New Champions, known as the “Summer Davos”, relaying Beijing’s intentions to enact more effective policies to bolster domestic demand.

Policymakers this month cut benchmark interest rates in an attempt to stimulate growth, but economists anticipate a range of further support measures over coming months.

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