European Stocks Climb, Bucking Asia Losses

European stock markets extended gains Tuesday despite Asian losses as investors assessed the outlook for global interest rates, dealers said

London, (UrduPoint / Pakistan Point News - 2nd Mar, 2021 ):European stock markets extended gains Tuesday despite Asian losses as investors assessed the outlook for global interest rates, dealers said.

Equities rebounded Monday from last week's heavy selloff on easing US money market rates, fading inflation fears plus progress on coronavirus vaccine rollouts and the passage of President Joe Biden's $1.9-trillion stimulus package.

"European markets are trading more cautiously," noted analyst Michael Hewson at trading firm CMC Markets UK.

Investors were mulling the US Federal Reserve's "ambivalence on the recent sharp rise in US bond yields", he added.

The rise in yields on government bonds in the US and other key economies last week sparked a market meltdown which was exacerbated by profit-taking.

Higher yields had prompted worries about a sudden shift in monetary policy toward higher interest rates.

However, a stabilisation in the bond market on Friday and Monday appears to have staunched the bleeding for now and analysts said worries over a surge in inflation and rate hikes have been overdone.

- Euro ducks under $1.20 - News Tuesday of steady eurozone inflation sent the European single currency briefly below $1.20 for the first time in three weeks as it too dampened speculation about higher interest rates.

The Eurostat agency said inflation in the 19 countries that use the euro ran at 0.9 percent last month, the same as in January.

In Asia Tuesday, equities sank after a top Chinese regulator raised concerns that bubbles were forming in the financial markets.

US and European markets were not reflective of their underlying economies and would face corrections "sooner or later", said China Banking and Insurance Regulatory Commission chairman and central bank member Guo Shuqing.

Guo's comments come after a number of observers warned equities were due a retreat following a year-long advance from their March 2020 nadir.

"Asia markets have slipped back today after Chinese regulators warned on the prospect of asset bubbles in overseas markets," added Hewson.

"This is hardly a new phenomenon; there's been talk about bubbles in US markets for months and China's property market isn't immune to these sorts of concerns either." In commodities, oil prices stabilised ahead of a key OPEC+ producer meeting later this week.

In Washington, the Senate is due to debate Biden's economic rescue package after it passed the House at the weekend.

- Key figures around 1200 GMT - London - FTSE 100: UP 0.4 percent at 6,616.77 points Frankfurt - DAX 30: UP 0.5 percent at 14,083.58 Paris - CAC 40: UP 0.5 percent at 5,819.70 EURO STOXX 50: UP 0.4 percent at 3,721.24 Tokyo - Nikkei 225: DOWN 0.9 percent at 29,408.17 (close) Hong Kong - Hang Seng: DOWN 1.2 percent at 29,095.86 (close) Shanghai - Composite: DOWN 1.2 at 3,508.59 (close) New York - Dow: UP 2.0 percent at 31,535.51 (close Monday) Euro/dollar: DOWN at $1.2030 from $1.2049 at 2200 GMT Pound/dollar: UP at $1.3927 from $1.3925 Euro/pound: DOWN at 86.38 pence from 86.53 pence Dollar/yen: UP at 106.92 yen from 106.76 yenBrent North Sea crude: DOWN 0.2 percent at $63.57 per barrelWest Texas Intermediate: FLAT at $60.65 per barrel.