Tech share bounce helps Wall Street

TDT | London

The Daily Tribune - www.newsofbahrain.com

Major tech stock s bounced higher yesterday after posting heavy losses the previous day on trade fears, helping Wall Street to mostly advance. The tech-heavy Nasdaq Composite rose 0.7 percent at the start of trading after slumping 2.8 percent the previous day. The S&P 500 added 0.3 percent while the blue-chip Dow shed 0.3 percent after having set a third consecutive record close on Wednesday.

Europe’s major stock markets also rose, London energised by the previous day’s oil price surge, while Asia stumbled after on tech sector concerns. London’s FTSE 100 index rallied with BP and Shell shares gaining more than one percent as investors also digested steady UK unemployment data.

Oil prices had vaulted two percent higher Wednesday after signs of strengthening crude demand in top consumer the United States, though the market stabilised yesterday. Energy majors tend to win a shot in the arm from rising crude futures that boost their revenues and profits. The dollar firmed following losses caused by growing expectations the US Federal Reserve would cut interest rates at least once this year.

ECB kept interest rates steady

Central Bank yesterday kept its key interest rates steady as it waits for firm indications that consumer price rises are stable before reducing borrowing costs again. The bank kept the key deposit rate at 3.75 percent, after the first cut in June ended an unprecedented streak of hikes to tame runaway inflation.

But ECB chief Christine Lagarde said there was no pre-determined rate path and the decision at September’s meeting was “wide open” and would depend upon the data. On Wednesday, tech firms took a hit after a report said US President Joe Biden would target firms supplying China with key semiconductor technology.

Biden is reportedly looking at imposing strict curbs on companies including Tokyo Electron and Dutch firm ASML if they continued allowing Beijing access to their chip tech. Sentiment was also dented by Donald Trump’s comments that crucial chip supplier Taiwan -- home to TSMC and other major producers should pay the US for helping the island defend itself militarily against China. Nvidia shares, which slumped more than six percent Wednesday, bounced 3.5 percent higher at the start of trading yesterday.

Shares in ASML, rose 2.5 percent after tumbling 12.7 percent on Wednesday. Shares in Tokyo Electron dived 8.8 percent in trading in Tokyo yesterday. “An interview with Donald Trump, for Bloomberg Businessweek, saw the former president casting doubt on US willingness to defend Taiwan, should he be (re)elected in November,” said Steve Clayton, head of equity funds at Hargreaves Lansdown. “With much of the world’s most advanced chip manufacturing capabilities located within Taiwan... that was not a message the market wanted to hear.