Scoreboard: Confidence surge

Both Wall Street and European markets made solid gains on the back of strong corporate earnings and consumer confidence data, while Twitter shares fell sharply.


In the US, the Case Shiller home price index fell by 0.1 per cent in August to stand 5.6 per cent higher than a year ago. Consumer confidence rose from 86.0 to a 7-year high of 94.5 in October, well above forecasts centred on 87.0. Durable goods orders fell by 1.3 per cent in September, short of forecasts tipping a 0.5 per cent gain. The Richmond Federal Reserve composite index also rose from 14 to 20 in October.

European shares rose on Tuesday in response to encouraging corporate earnings results. Shares in UBS rose by 5.8 per cent after posting better-than-expected earnings and shares in pharmaceutical giant Novartis rose by 1.8 per cent. The FTSEurofirst 300 index rose by 0.9 per cent with the UK FTSE up by 0.6 per cent and the German Dax lifted by 1.9 per cent. Australia's major miners were higher in London trade with shares in BHP Billiton up by 1.3 per cent while Rio Tinto gained 1.2 per cent.

US sharemarkets rose on Tuesday, extending gains through the afternoon session. Investors were encouraged by the latest reading on consumer confidence as well as corporate earnings results more generally. Energy stocks rose in response to a modest lift in oil prices. But shares in Twitter lost 9.8 per cent with investors disappointed by company guidance. The Dow Jones rose by almost 188 points or 1.1 per cent with the S&P 500 index up by 1.2 per cent while the Nasdaq rose by 78 points or 1.8 per cent. 

US treasuries eased modestly on Tuesday (yields higher). Economic data was mixed and equities rose but losses were capped by caution ahead of the Federal Reserve decision. US two-year yields were steady near 0.394 per cent while US 10-year yields were up by 3 points to 2.294 per cent.

Major currencies were mixed against the greenback over European and US sessions on Tuesday. The Euro rose from lows near $US1.2685 to highs near $US1.2760, ending US trade near $US1.2735. The Aussie dollar rose from lows near US88.10c to lows near US88.75c before ending the US session near US88.60c. And the Japanese yen held between ¥107.70 per US dollar and ¥108.17, ending US trade near ¥108.15.

World oil prices rose on Tuesday with a weaker US dollar supporting prices. A lower greenback improves the purchasing power of European and Asian buyers for dollar-denominated commodities. Brent crude rose by US20c to $US86.03 a barrel while the US Nymex crude price rose by US42c or 0.5 per cent to $US81.42 a barrel.

Base metal prices were higher on the London Metal Exchange on Tuesday. Nickel soared 5.2 per cent as analysts speculated that the Indonesian ban on exports may remain in place. Prices of other metals rose up to 1.6 per cent. Gold rose slightly on Tuesday with the Comex gold futures quote up by US10c an ounce to $US1,229.40 per ounce. Iron ore was down by US80c on Tuesday or 1.0 per cent to $US78.80 a tonne.

Ahead: In Australia, the Bureau of Statistics releases 'Selected Living Cost Indexes'. In the US, the Federal Reserve hands down its interest rate decision.

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