- Global
stocks rose on Wednesday, lifted mostly by upbeat corporateearnings . China toned down its criticism of online gaming, easing fears that the industry is next in line for the ongoing tech crackdown.- "The incident is a reminder of the risks associated with unpredictable regulation in China," a UBS economist said.
European and Asian stocks edged higher on Wednesday, but US futures remained steady as investors weighed up strong earnings from bank and energy corporates.
Chinese state media softened its tone on online gaming a day after a state-run outlet slammed the industry, calling it "spiritual opium" and "electronic drugs."
This has eased fears that the online entertainment sector will be next in line in the ongoing Chinese regulatory crackdown, but investors are still cautious of an overall tightening of scrutiny of the tech economy.
Futures on the Dow Jones, S&P 500, Nasdaq were about flat, signalling a steady open later in the day.
A string of robust second-quarter US corporate earnings is seen as offsetting worries about the spread of the Delta coronavirus variant, which could impact economic growth if restrictions on activity are needed. Toyota, Sony, CVS Health, General Motors, and Uber are due to report today.
Europe's Stoxx 600 banks index gained 0.9%, driven by upbeat earnings from Societe Generale and Bank of Ireland. In the US on Tuesday, banks were also among the strongest-performing stocks, with only energy and biotech shares faring better, Deutsche Bank strategists said.
UK-based oil giant BP beat second-quarter earnings estimates on Tuesday, and matched competitors by announcing an increase in dividends and share buybacks.
London's FTSE 100 rose 0.3%, Euro Stoxx 50 moved 0.5% higher, and Frankfurt's DAX added 0.5%.
The monthly ADP payrolls data, which will reflect the health of the US private-sector labor market, is due later Wednesday. But it may not capture the explosion of business creation in the past 12 months, according to Paul Donovan, chief economist at UBS Global Wealth Management.
"The TikTok merch sellers and Amazon Marketplace retailers are employed, but not in a way the numbers register," Donovan said.
In Asia, the Shanghai Composite and Hong Kong's Hang Seng rose 0.8%, while Tokyo's Nikkei fell 0.2%. Investors in the region continued to monitor Chinese media comments on gaming.
Tencent's shares reversed losses by rising as much as 4.9%, after the Chinese government's official newspaper, the People's Daily, published a editorial piece touching upon the effects of online gaming. Its comments were less harsh than those in China's Economic Information Daily, which called for more bold measures.
"However, the incident is a reminder of the risks associated with unpredictable regulation in China," UBS's Donovan said.