20-05-2025
- Business
- Free Malaysia Today
European stocks close higher as Wall Street dips
In Europe, London and Paris closed higher, while Frankfurt's DAX gained 0.4%, surpassing 24,000 points for the first time. (AP pic)
NEW YORK : European and Asian stocks closed higher on Tuesday while Wall Street equities retreated as markets monitored US Treasury yields amid worries about the US budget deficit.
Major US indices spent the entire session in negative territory as the S&P 500 finished lower after six straight positive sessions.
'The main driver is a consolidation day,' said analyst Patrick O'Hare. 'The market has just been so red hot.'
US President Donald Trump visited Capitol Hill Tuesday, where he faces challenges to unify a House Republican caucus that includes lawmakers from high-tax Northeastern states seeking a bigger tax deduction and members who are worried about increasing the deficit.
Investors have also been fixated on higher yields in the Treasury market. Moody's highlighted the deficit last week in a downgrade of the US credit rating.
In Europe, London and Paris finished higher and Frankfurt's DAX gained 0.4% to go past 24,000 points for the first time.
Some of the rise stemmed from hopes of a European Central Bank interest rate cut next month, said Philippe Cohen, portfolio manager at Kiplink.
Luxury clothing company Chanel waited until after Paris's close to report a 28% drop in 2024 net profit.
Asian stocks closed mostly higher, with Hong Kong rising more than one percent, buoyed by China cutting its interest rates to historic lows, and Tokyo also up.
The Chinese central bank move, which had been expected, comes as officials battle to kickstart the economy amid trade tensions with the US and a persistent domestic spending slump.
Elsewhere, the Australian central bank cut its key interest rate to its lowest level in two years, citing steady progress in bringing inflation under control.
In corporate news, billionaire Elon Musk said he was pulling back from spending his fortune on politics, and asserted the Tesla electric car company he runs was doing well despite blowback over his support of Trump.
Aside from a Tesla sales decline in Europe, 'we're strong everywhere else,' Musk said.
Chinese battery giant CATL ended its first day on the Hong Kong Stock Exchange more than 16% higher, having raised US$4.6 billion in the world's biggest initial public offering this year.
A global leader in the sector, CATL produces more than a third of all electric vehicle batteries sold worldwide.
