By Niket Nishant and Scott Murdoch
LONDON/SYDNEY, Feb 18 (Reuters) – Global shares rose on Wednesday as investors took a breather following an artificial intelligence-driven selloff, while assessing a report that European Central Bank President Christine Lagarde plans to leave her role early.
Gains in defence and mining stocks pushed the STOXX 600 up 0.8% to a record high, with the pan-European index on course for its third straight day of gains. Wall Street futures also climbed 0.6% a day after the main indexes advanced modestly.
The moves offer a reprieve for investors hurt by bruising declines in recent weeks, driven by fears that AI may upend the labour market and make some businesses, particularly in the software industry, obsolete.
“Ultimately, the future of software products and companies requires a more balanced and nuanced view. Not all software companies will go bankrupt,” said Julian Klymochko, CEO at alternative investment solutions firm Accelerate Financial Technologies.
“That said, many software firms will be negatively impacted either by an increased supply of competitors or reduced demand for their products.”
POTENTIAL LAGARDE DEPARTURE IN FOCUS
The Financial Times reported that ECB President Lagarde plans to leave her job ahead of next year’s French presidential election.
“She navigated one of the most volatile periods in modern financial history. If she departs early, it marks the end of an era defined by crisis management and the beginning of a high-stakes tug-of-war for the future of the euro,” said Charles-Henry Monchau, chief investment officer at SYZ Group in Geneva.
The euro dropped 0.2% on Wednesday to $1.1833, while Germany’s 10-year bond yield, the euro zone benchmark, was unchanged at 2.74%.
Elsewhere, talks to end the war in Ukraine entered a second day. In an interview with Axios, Ukrainian President Volodymyr Zelenskiy said U.S. President Donald Trump was exerting undue pressure on him in trying to secure a resolution.
“A continued buildup in geopolitical tensions would likely curb investors’ willingness to take on risk,” said Ryan Sweet, managing director of macro forecasting and analysis at Oxford Economics.
ASIA FIRM IN LIGHT HOLIDAY TRADE
Japan’s benchmark Nikkei 225 index rose 1%, snapping a three-day selloff, while Australia’s S&P/ASX200 was up 0.5%. Mainland China, Hong Kong, Singapore, Taiwan and South Korea were among markets closed for Lunar New Year holidays.
Brent and West Texas Intermediate crude oil futures were up between 0.2% and 0.3%, at $67.62 a barrel and $62.47 respectively, after both closed at more than two-week lows in the previous session.
Following talks in Geneva on Tuesday, Iran’s foreign minister said Tehran and Washington had reached an understanding on the main “guiding principles” to resolve their longstanding nuclear dispute, easing worries about a military conflict near the Strait of Hormuz that could disrupt global oil supplies.
Gold recovered from early losses. It was up 0.9% at around $4,922 per ounce, with silver gaining 3.5% to around $76.05 per ounce.
Bitcoin edged 0.7% higher, after three straight sessions of losses. Ether, the second-biggest crypto token, rose nearly 1% and was on track for its longest winning streak since late January.
“Early signals point to stabilization in the crypto market following the early February unwind,” said Thomas Perfumo, global economist at crypto exchange Kraken.
Moves in traditional currencies were also muted. The pound was steady at $1.3574 after British inflation data dropped broadly in line with expectations, while the dollar gained 0.3% against the Japanese yen to 153.7.
The U.S. dollar index, which measures the greenback against a basket of major peers, was up 0.1%.
The dollar could be influenced by minutes from the Federal Reserve’s January meeting, due later on Wednesday, which could give signals on the path for interest rates.
The 10-year Treasury yield was up nearly 2 basis points to 4.07%, off Tuesday’s two-and-a-half-month low of 4.02%.
(Reporting by Niket Nishant in London and Scott Murdoch in Sydney. Editing by Kevin Buckland, Lincoln Feast and Mark Potter)
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