By Trevor Hunnicutt
NEW YORK (Reuters) - Stocks on major world markets hit their highest in more than a month on Tuesday, on good earnings reports from U.S. companies and after China promised fiscal action to support the world's second-largest economy.
MSCI's global stock index <.MIWD00000PUS> gained 0.58 percent.
The focus in the United States remained the banner corporate earnings reporting season which is in its busiest week for the quarter.
To date, 83 percent of the 110 S&P 500 stock index companies that have posted results have beaten profit estimates, according to Thomson Reuters I/B/E/S.
"The results have been quite strong so investors have been a little more exuberant than they were at the end of June when the headlines were less about companies beating earnings than about the Trump administration beating the tariff trade drum," said Matthew Bartolini, head of SPDR Americas research at State Street Global Advisors.
Stellar earnings from Google parent Alphabet
The Dow Jones Industrial Average <.DJI> rose 197.65 points, or 0.79 percent, to 25,241.94, the S&P 500 <.SPX> gained 13.42 points, or 0.48 percent, to 2,820.4 and the Nasdaq Composite <.IXIC> dropped 1.11 points, or 0.01 percent, to 7,840.77. [.N]
Metals and oil prices surged thanks to hopes for Chinese tax cuts and a lower yuan.
Clawing its way back from prices near one-year lows, copper
China's offshore yuan hit a one-year low and Beijing's government bond yields jumped after the government said it would cut taxes to support economic growth and traders bet on further monetary policy easing. Shanghai blue chips <.CSI300> closed up 1.5 percent at a one-month high.
"The big story is that the Chinese currency continues to slide," said Societe Generale S.A. foreign-exchange strategist Alvin Tan.
"The government is moving towards policies that are supporting growth," he added, saying the trend was likely to bring a reaction from the United States eventually.
The Chinese offshore yuan
"In our view, given how little is priced, there is limited room for further escalation in trade tensions and no room whatsoever for competitive devaluation, let alone a currency war," wrote analysts from the Institute of International Finance Inc in a note.
Bonds yields globally were volatile following speculation that the Bank of Japan (BoJ) may soon trim its massive stimulus.
Bond yields gyrated, with ten-year benchmark U.S. Treasury notes
Bond bulls had been smarting from speculation that the BoJ is close to scaling back its monetary stimulus, a risk that lifted long-term borrowing costs globally.
Markets were worried that Japanese investors would have less incentive to hunt offshore for yield, said ANZ economist Felicity Emmett.
"The 10-basis-point steepening in the Japanese yield curve is massive in the context of a market that rarely moves more than 1 basis point," she said.
"It reflects a broader fear that central banks are reducing their purchases while U.S. bond supply is set to rise significantly."
Part of the shift in yields was caused by talk that data on second-quarter U.S. economic growth, due on Friday, would top current, 4.1 percent forecasts.
(Reporting by Trevor Hunnicutt; Additional reporting by Wayne Cole in Sydney, Marc Jones and Abhinav Ramnarayan in London and Andres Guerra Luz in New York; Editing by Clive McKeef)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Jul 25, 2018 03:05:15 IST