Stock Market Today: Indian shares picked up, European dived

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The European stock markets started the session on Tuesday with the majority of falls. Yesterday, the European leisure and tourism sector reacted positively to the announcement that the European Commission was willing to allow vaccinated American tourists to travel to Europe. Consequently, the tourism sector, along with the banking, energy sectors, displayed the best performance during the day. 

Meanwhile, sectors like the food and beverages or the health sector lagged somewhat behind.

The European stock markets open today without significant variations and a defined trend in a session once again marked by business results, with the accounts of important companies such as HSBC and UBS banks or the oil company BP.

In the afternoon, the consumer confidence index will be published in the US. Improved numbers are expected in April thanks to the good progress of the population’s vaccination process and the reopening of this economy. 

The European stock exchanges began the session on Tuesday in the mixed ground. Wall Street closed yesterday with the same trend but achieved its first record since February in the Nasdaq composite index and the selective S&P 500.

Tesla presented a significant increase in its quarterly profit 

The Nasdaq gained a solid 0.87%. Meanwhile, the S&P 500 advanced 0.18%, surpassing its last all-time high by just 3 integers. The Dow Jones ended in the red with a loss of 0.18%.

Yesterday Tesla, which can be included in this type of securities, presented a substantial increase in its quarterly profit, comfortably exceeding analysts’ expectations. However, it did not convince investors since its car sales grew at a lower rate as expected by analysts – its shares lost just over 2% in after-hours trading.

Today it is the turn of two of the largest companies in this sector: Alphabet, Google’s parent company, and Microsoft. So, we must be very attentive to how investors react to the figures they release.

What can you expect from the US results season?

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American companies are starting on the path to recovering their profits. According to forecasts, earnings per share will increase by 25% compared to the same period of the previous year. Revenues, according to analysts, will be 9% higher than in the first three months of 2020. 

Besides these encouraging forecasts, the expectations for some sectors are even better. Analysts have high hopes for cyclical parts of the market, such as consumer stocks, finance, and natural resources. The improvements are mainly due to the magnitude of the collapse in economic activity last year.

What companies will lead the way?

The results season has only just begun. As always, some of the big banks are among the fastest-growing firms. Analysts expect that solid commercial activity, combined with the release of loan reserves, will boost earnings. Many lenders made sizable provisions if the loans they made in the early days of the Covid crisis went wrong. However, their planning turned out to be too pessimistic, as many companies subsequently received government aid. It meant that they did not have to default on their financial obligations.

In the fourth quarter, we saw some of the big banks start releasing their reserves. The first data from entities such as JP Morgan, Wells Fargo, and Bank of America indicate that this process continued between January and March. There were also hopeful signs of improvement in trading figures among investment banks. Goldman Sachs has noted that there has been increased activity in both its fixed income and equity divisions.

In the meantime, many investors will wonder what’s new in Big Tech and other large-cap companies. To know these figures, we will have to wait until the end of April. That’s when a large number of S&P members, representing an even larger share of the total US market capitalization, will disclose their benefits.

Asian equities trades mixed because of a light calendar

Several factors generated caution in the stock market worldwide. On the one hand, it has been an increase in the number of infections of the coronavirus. Moreover, the vast majority of US firms presenting better than expected results in their quarterly accounts oppose the catalysts that are moving the markets.

The MSCI’s index of Asia-Pacific shares outside Japan rose 0.66%. Meanwhile, Japan’s Nikkei 225 hiked up by 0.55%. 

Elsewhere, Aussie and Kiwi markets stayed dull during a bank holiday due to ANZAC Day.

What’s more, Chinese markets also trade mixed amid global anger over Xinjiang and the South China Sea. The gloomy performance could also be traced to the stocks in Indonesia and the Philippines. 

Southeast Asian tech giants could buy startups after going public

According to Golden Gate Ventures, Southeast Asian tech giants could purchase startups with the funds they raise when going public. 

The firm states that going public gives them the capital to grow. It gives them the valuation to make these kinds of acquisitions, a combination of cash and equity.

This happened in China 10 or 15 years ago, with Baidu, Alibaba, and Tencent buying up smaller companies.

Indian shares picked up 

Indian shares increased ahead of earnings reports from blue-chip companies. The stock market sentiment in the country is positive despite new cases of coronavirus infections in the country, totaling more than 300,000. 

The NSE Nifty 50 index gained 0.53% to 14,562.1 by 0441 GMT. Meanwhile, the benchmark S&P BSE Sensex grew by 0.54% at 48,649.84. 

Last week, amid concerns over increases in infections, Indian indexes posted their third weekly loss. 

Infections have decreased in Mumbai since Maharashtra state entered lockdown earlier this month. New Delhi and Karnataka have also imposed lockdowns to limit the spread of the virus.

According to a strategist at Geojit Financial Services, the steady drop in coronavirus cases is a great relief. For mid-may, the market might take signals from that. 

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