Volkswacht Bodensee - Stocks advance cautiously ahead of central bank rate moves

Hong Kong stocks jumped over four percent after China's Politburo signalled it would step up support for the stuttering economy.

"The enthusiasm hasn't filtered through to Europe and the US though, perhaps due to the lack of detail currently on the stimulus measures, but also the distraction of the central bank meetings over the next 48 hours," said market analyst Craig Erlam at trading platform OANDA.

"Progress on inflation could mean both the Fed and ECB are about to announce their final rate hikes of the tightening cycle; the question is will they acknowledge that or maintain a hawkish position over the rest of the summer?"

The Federal Reserve is to announce its decision on Wednesday and the European Central Bank on Thursday.

Europe's leading markets finished mostly higher after wobbling during the session, with Paris shedding 0.2 percent.

Frankfurt edged 0.1 percent higher despite a key survey showing German business sentiment has fallen for the third month in a row, as pessimism about the state of Europe's largest economy deepened.

The Ifo institute's closely watched confidence barometer, based on a survey of 9,000 companies, fell to 87.3 points in July from 88.6 points last month.

Data Monday showed eurozone economic activity shrank at its fastest rate for eight months in July owing to cuts in manufacturing.

Wall Street's main indices were modestly higher in late morning trading after opening mixed.

Sentiment was supported by the IMF lifting its 2023 global growth forecast by 0.2 percentage points to 3.0 percent.

In corporate news, shares in General Motors fell 4.4 percent despite the carmaker lifting its full-year forecasts after posting a huge jump in second quarter profit and sales.

The company must soon renegotiate a labour contract with the United Auto Workers.

Shares in Spotify fell by 13 percent after the music streaming service reported a huge increase in its operating loss despite increasing the number of paid subscribers and raising prices.

A broadly positive earnings season so far has also lifted spirits on trading floors, while investors will be keeping a close eye on upcoming releases from Microsoft, Google owner Alphabet and Facebook parent Meta.

In China, with recent data showing growth stuttering and business activity slowing in the world's second biggest economy, top leaders signalled a fresh push to get the post-Covid recovery back on track, particularly the troubled property sector, which accounts for a major part of China's economy.

The announcement "keeps a supportive tone, which can help provide some support for the recovery and it may provide some boost to market sentiment", said Erin Xin at HSBC.

While it was nowhere near the blockbuster spending plans seen in the past, the news gave Chinese stocks a boost.

Among the standout performers were developers Country Garden and Sunac, which piled on at least 17 percent each.

The two firms are among several struggling under the weight of massive debts that have sent shivers through the industry.

Despite a series of announcements and minor cuts to interest rates, investors have been largely disappointed by the policy response from authorities, with very few concrete measures being unveiled.

The latest stimulus promises may have also failed to boost sentiment more widely due to the sudden sacking of Qin Gang as foreign minister after only seven months, and the replacement of the central bank chief.

- Key figures around 1530 GMT -

New York - Dow: UP less than 0.1 percent at 35,441.30 points

London - FTSE 100: UP 0.2 percent at 7,691.80 (close)

Frankfurt - DAX: UP 0.1 percent at 16,211.59 (close)

Paris - CAC 40: DOWN 0.2 percent at 7,415.45 (close)

EURO STOXX 50: UP 0.2 percent at 4,391.30 (close)

Tokyo - Nikkei 225: DOWN 0.1 percent at 32,682.51 (close)

Hong Kong - Hang Seng Index: UP 4.1 percent at 19,434.40 (close)

Shanghai - Composite: UP 2.1 percent at 3,231.52 (close)

Euro/dollar: DOWN at $1.1049 from $1.1067 on Monday

Pound/dollar: UP at $1.2861 from $1.2821

Euro/pound: DOWN at 85.91 pence from 86.29 pence

Dollar/yen: DOWN at 141.04 yen from 141.51 yen

Brent North Sea crude: UP 0.7 percent at $83.34 per barrel

West Texas Intermediate: UP 0.9 percent at $79.41 per barrel

burs-rl/lcm

P.Anderson--BTB