World shares are mostly higher after US stocks rally on strong earnings

NEW YORK: World shares were mostly higher on Wednesday following a broad rally on Wall Street.

Germany's DAX rose 0.5 per cent to 25,423.64, and the CAC 40 in Paris added 0.5 per cent to 7,880.90. Britain's FTSE 100 edged 0.1 per cent higher, to 10,743.65.

US futures were mixed, with the contract for the S&P 500 up 0.1 per cent, while that for the Dow Jones Industrial Average slipped 0.1 per cent.

In Asian trading, the Kospi in Seoul gained 3.3 per cent to 5,735.66.

South Korean AI company Elice, whose 32 per cent drop Tuesday in its first day of trading spooked markets, rebounded on Wednesday, hitting the upward limit of 29.9 per cent.

Tokyo's Nikkei 225 rose 0.9 per cent to 64,621.24 after Japan reported that its exports jumped 16.7 per cent in September from a year earlier, on strong sales of autos and computer-related components. Imports surged 18.9 per cent, largely thanks to higher prices for oil due to the Iran war, nearly doubling Japan's trade deficit for the same month a year earlier.

“Robust AI demand should continue to support tech-related goods exports. However, non-AI capital goods and auto are likely to weaken amid high energy prices and borrowing costs, weighing on overall exports,” Oxford Economics said in a report.

Markets in Greater China were mostly lower, with Hong Kong's Hang Seng shedding 0.9 per cent to 23,651.87, while the Shanghai Composite index fell 0.6 per cent to 3,713.36. Taiwan's Taiex rose 1.3 per cent.

In Australia, the S&P/ASX 200 picked up 0.2 per cent to 8,831.30.

On Tuesday, most US stocks rose following strong profit reports from Equifax, Hasbro and other companies, while oil prices eased back after nearing their highest levels since the war with Iran began.

The S&P 500 added 0.3 per cent. The Dow Jones Industrial Average rallied 1 per cent, while more swings for stocks in the artificial intelligence industry sent the Nasdaq composite to a modest loss of less than 0.1 per cent.

Big expectations for earnings growth have allowed the US stock market to hit records recently despite worries about high inflation, higher interest rates and other challenges weighing on Wall Street.

Equifax rallied 11.3 per cent for one of the market's biggest gains after reporting a bigger profit for the summer than analysts expected, despite high mortgage rates slowing some parts of its business.

Hasbro climbed 11.2 per cent after the toy company said its “Magic: The Gathering” game made more than USD 600 million in revenue during a quarter for the first time. 3M rose 5.8 per cent after the company behind Ace bandages and Scotch-Brite sponges likewise reported a stronger-than-expected profit, even as shoppers broadly feel discouraged by high inflation.

General Motors sank 6.8 per cent despite reporting a bigger profit than analysts expected. It also announced a programme to send up to USD 20 billion to investors by buying back its stock.

The pressure is on companies to deliver bigger profits not only now, but also in the future. GM gave a forecast range for profit over the full year of 2026 whose midpoint fell short of analysts' expectations.

AI stocks continued to swirl. Euphoria around the technology's boom has given way to worries that high interest rates in the bond market will slow the borrowing that's allowed companies to buy so many AI chips. Last week was the US stock market's worst since June because of weakness for AI-related companies.

Stocks also got a lift after the price for a barrel of Brent crude, the international standard, erased an early gain. However, early Wednesday, Brent jumped 1.1 per cent to USD 109.95 per barrel. On Tuesday, it rose to near USD 112, approaching its highest price since the war with Iran began in late February.

Brent's price has been yo-yoing between USD 97 and USD 112 per barrel this month on uncertainty about when the energy industry will return to normal.

US benchmark crude rose 1.2 per cent early Wednesday, to USD 99.01 per barrel.

In other dealings, the US dollar slipped to 158.15 Japanese yen from 158.17 yen. The euro fell to USD 1.1222 from USD 1.1239.