BOJ Relief Boosts Nikkei, Nasdaq Futures Rise on Tech Rebound

The Nikkei rebounded 2.8% after a statement from BOJ Deputy Governor Shinichi Uchida quelled fears of imminent rate hikes. European stock markets are set to rally, with EUROSTOXX 50 futures up 1.3% and FTSE futures rising 1.2%. Nasdaq futures turned 1.1% higher following a significant drop in Super Micro Computer shares after missing earnings estimates.

Equities

The FTSE 100 closed 0.2% higher on Tuesday, buoyed by gains in construction and materials stocks. This came after a significant sell-off on Monday driven by US recession fears. The mid-cap FTSE 250 index also added 0.6%, recovering from its lowest level in over three months.

Keller Group saw an impressive 11.6% rise after reporting strong half-yearly results, topping the FTSE 250 index. Meanwhile, Travis Perkins fell 0.4% after cutting its annual earnings guidance and reporting a 33% decline in first-half profit. Domino's Pizza Group dropped significantly after lowering its full-year profit forecast, aiming to pass on lower food costs to franchisees and offer more value deals to customers.

In the US, the S&P 500 and Nasdaq both ended 1% higher on Tuesday as investors returned to the market following Monday's dramatic sell-off. The Dow Jones Industrial Average rose 0.8%. Nvidia shares jumped nearly 4%, significantly boosting both the S&P 500 and Nasdaq.

Uber shares surged 11% after surpassing Wall Street estimates for second-quarter revenue and core profit, driven by steady demand for its services. Caterpillar shares gained 3% following a better-than-expected second-quarter profit, attributed to higher prices for its larger excavators and other equipment despite moderating demand in North America.

Forex & Commodities

The dollar recovered against most major peers on Tuesday, steadying at 145.01 yen, up 0.54% after five straight sessions of declines. The greenback's rise followed reassurances from the Bank of Japan, calming market volatility. In Europe, the euro fell 0.21% to $1.0928, while sterling dropped 0.64% to $1.2697, its lowest in five weeks, as the Bank of England's recent rate cut weakened its earlier strength.

Gold prices held steady, with spot gold up 0.24% at $2,395.00 per ounce, and US gold futures rising 0.14% to $2,435.10. Traders adjusted their expectations for a Fed rate cut in September to 50 basis points, down from 85% the previous day. The dollar index rose 0.3%, making gold more expensive for overseas buyers.

Tullow Oil reported a profit increase to $196 million for the first half of 2024, driven by higher crude prices. The company benefited from an OPEC+ production cut extension and supply concerns due to Middle East tensions. Tullow's realised oil price after hedging was $77.7 per barrel, up from $73.3 per barrel last year.

Bitcoin rebounded 4.26% to $56,725 after hitting a near six-month low of $49,445 on Monday. The Australian dollar gained 0.55% to $0.6533 following comments from the Reserve Bank of Australia, indicating rate cuts were not imminent.

Economic Calendar

• Earnings reports from Glencore, Coca-Cola, Puma, and Novo Nordisk
• Trade data from Germany
• UK house prices for July
• ECB board member Elizabeth McCaul participates in a panel discussion
• ECB's Olli Rehn gives an opening speech at the Bank of Finland seminar