Arizona Tribune - Stocks advance but traders fret over outlook

European stocks were higher in midday trading as bond yields fell, following a positive session in Asia.

The gains followed a mixed showing on Monday as investors tried to turn the tide of losses that have swept over markets in recent weeks.

The gains, including a jump in US tech stocks, "looked more like a correction than a reaction to fresh news, as there was no fresh news that went against the slowing China rhetoric" or indication of a possible shift in policy by US monetary policymakers, said Swissquote Bank analyst Ipek Ozkardeskaya.

Markets globally have struggled this month on the prospect that the US Federal Reserve will hike borrowing costs once more before the end of the year as it looks to bring inflation to heel.

A string of data out of Washington in recent weeks has indicated the world's top economy remains resilient and the jobs sector tight, even after more than a year of rising interest rates squeezing companies and consumers.

This has prompted concerns that the Fed could lift rates further and possibly push the economy into recession.

A planned speech this week by Fed chief Jerome Powell at a gathering of central bankers and business leaders will be closely watched for some guidance on officials' thinking and future policy.

"Each incremental hike that they have from here just raises the risk that we have a much sharper slowdown in 2024 and perhaps even a recession," Lori Heinel, at State Street Global Advisors, told Bloomberg Television.

However, she added that "as long as inflation remains contained, we think that they will take a pause here".

There is also still unease among traders about the Chinese economy, with another small cut in interest rates doing little to allay fears of a painful slowdown.

While authorities have pledged a series of measures to get the post-Covid recovery back on track, there has been little detail, and they are facing growing calls to unveil more wide-ranging stimulus.

"There are doubts about the effectiveness of further monetary policy stimulus ability to support sluggish credit demand, with the narrower follow-through from the lending finance rate last week leaving hopes for broader stimulus with fiscal policy," said National Australia Bank's Taylor Nugent.

Adding to the problems are fears about the country's property sector, with a number of major developers including Country Garden and Evergrande on the ropes with vast debts and struggling to meet interest obligations.

"Policy easing announcements intended to invigorate market confidence have fallen short of their desired impact," said SPI Asset Management's Stephen Innes.

He added that while leaders last month promised to take a "fresh perspective" toward the property sector, "subsequent actions taken were only characterised by gradual and incremental measures to ease property-related regulations, limited primarily to select tier-2 and tier-3 cities".

- Key figures around 1015 GMT -

London - FTSE 100: UP 0.7 percent at 7,304.77 points

Frankfurt - DAX: UP 1.1 percent at 15,768.56

Paris - CAC 40: UP 1.2 percent at 7,287.36

EURO STOXX 50: UP 1.4 percent at 4,284.04

Tokyo - Nikkei 225: UP 0.9 percent at 31,856.71 (close)

Hong Kong - Hang Seng Index: UP 1.0 percent at 17,791.01 (close)

Shanghai - Composite: UP 0.9 percent at 3,120.33 (close)

New York - Dow: DOWN 0.1 percent at 34,463.69 (close)

Euro/dollar: UP at $1.0903 from $1.0897 on Monday

Pound/dollar: UP at $1.2785 from $1.2755

Euro/pound: DOWN at 85.27 pence from 85.41 pence

Dollar/yen: DOWN at 145.58 from 146.22 yen

West Texas Intermediate: DOWN 0.1 percent at $80.61 per barrel

Brent North Sea crude: DOWN 0.3 percent at $84.17 per barrel

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M.Robinson--AT