Dollar hits one-year yen high but stocks split

LONDON: European and Asian stock markets extended gains Tuesday, while the dollar hit a one-year high above 110 yen fuelled by growing optimism about the global economic recovery.

But that optimism hobbled US stocks, as it has occasionally in recent weeks, as concerns mount that the rebound will push up inflation and prompt the US Federal reserve to raise interest rates earlier than it has indicated.

Wall Street's major indices were lower in late morning trading, while the yield on US government debt rose.

Investors are unloading government debt "on persistent expectations for economic growth and inflation," said Patrick O'Hare at Briefing.com.

"These expectations are shining through despite concerns about the coronavirus trajectory in the US and quarter-end rebalancing that should favor bonds."

Investors may also be biding their time ahead of a number of data releases this week and Wednesday's expected announcement of a multi-trillion-dollar infrastructure programme by the Biden administration.

Important data announcements are also due this week, with most analysts tipping the year-long rally across equities to continue this year despite recent stutters.

The major call is Friday's US government employment report, which will give a fresh snapshot of the world's top economy as it slowly emerges from the crisis.

In European trading, Frankfurt's DAX blew through the 15,000 points level, rising as high as 15,029.70 points.

"The DAX has again set new record highs today, busting through the 15,000 level for the first time ever, once again driven by the likes of Volkswagen, who today named their US electric car division, Voltswagen," said market analyst Michael Hewson at CMC Markets UK.

The rebranding comes as Volkswagen has set itself the target of dominating the electric car market by 2025.

Its shares jumped nearly nine percent.

Oil prices fell around one percent on Tuesday as traffic resumed on the Suez Canal, while investors awaited Thursday's output meeting of OPEC and other major oil producers.

Observers were also tracking fallout from the sale of billions of dollars worth of stock by troubled US fund Archegos, which left several creditor banks exposed to huge losses, including Nomura of Japan and Switzerland's Credit Suisse.

App-driven food delivery company Deliveroo is meanwhile set for London's largest stock market launch in a decade with a valuation of £7.6 billion.

Deliveroo's initial public offering due Wednesday will be priced at £3.90 per share, a source close to the matter said Tuesday.

That values the Amazon-backed British group at the equivalent of 8.9 billion euros or $10.5 billion.

Key figures around 1530 GMT -

New York - Dow: DOWN 0.3 percent at 33,059.49 points

EURO STOXX 50: UP 1.2 percent at 3,928.42

London - FTSE 100: UP 0.5 percent at 6,772.12 (close)

Frankfurt - DAX 30: UP 1.3 percent at 15,008.61 (close)

Paris - CAC 40: UP 1.2 percent at 6,088.04 (close)

Tokyo - Nikkei 225: UP 0.2 percent at 29,432.70 (close)

Hong Kong - Hang Seng: UP 0.8 percent at 28,577.50 (close)

Shanghai - Composite: UP 0.6 percent at 3,456.68 (close)

Dollar/yen: UP at 110.25 yen from 109.81 yen at 2110 GMT

Euro/dollar: DOWN at $1.1728 from $1.1764

Pound/dollar: DOWN at $1.3723 from $1.3765

Euro/pound: UP at 85.46 pence from 85.44 pence

West Texas Intermediate: DOWN 1.1 percent at $60.89 per barrel

Brent North Sea crude: DOWN 0.9 percent at $64.42 per barrel