Dollar drops as European stocks climb on earnings

Sydney - The dollar fell and stocks rose as strong corporate results in Europe helped offset investor nerves ahead of the looming start to French elections.

The greenback slipped against most of its major peers. The Stoxx Europe 600 Index fluctuated before advancing, helped by a rally in food producers after Unilever NV and Nestle SA results beat estimates. Oil rebounded on signs output cuts could be extended, but was a long way from erasing Wednesday’s slump.

Investors are facing a stern test of nerves as a series of elections in Europe and tensions around North Korea and Syria ratchet up market risks. U.S. President Donald Trump’s travails trying to implement his fiscal agenda are also clouding the growth picture, while the Federal Reserve’s plan for monetary tightening looks increasingly unsure.

“This political uncertainty’s not going away for a while,”  said Ben Kumar, a London-based investment manager at Seven Investment Management, which oversees about £10bn.

“Markets are trying to get their heads around whether that will actually affect company earnings. For the first part of this year the message was no, it doesn’t matter, earnings upgrades came through in Europe and the US”

Upcoming events that investors will be watching:

US Vice President Mike Pence continues his Asia-Pacific trip with a stop in Jakarta.  The first round of voting in the French election is on Sunday and the two leading candidates will run off in a winner-takes-all contest on May 7.

Here are the main moves in markets:


Japan’s Topix index added 0.1%. The Hang Seng advanced 1%, Australia’s S&P/ASX 200 Index climbed 0.3% and South Korea’s Kospi index was up 0.5%. The Shanghai Composite was little changed, after four days of losses brought it to the lowest level since February 8.


The Stoxx Europe 600 Index advanced 0.2% at 11:16. S&P 500 futures rose 0.3%. The underlying gauge slid 0.2% on Wednesday.


The Bloomberg Dollar Spot Index fell 0.2% after rising 0.5% on Wednesday. The pound jumped 0.5% to $1.2835 and the euro climbed 0.5% to $1.0766. The yen advanced 0.2% to ¥109.02/$, following a 0.4% decline on Wednesday.


The yield on 10-year Treasuries rose two basis points to 2.23 after a five basis point advance on Wednesday. German government bond yields with a similar maturity added four basis points to 0.24%.


West Texas Intermediate oil increased 0.9% to $50.87 a barrel, after tumbling 3.8% on Wednesday when a report showed US gasoline supplies increased for the first time since February, while crude output keeps rising. Gold fell 0.1% to $1 278.79 an ounce.

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