World markets rally on Chinese stimulus plan, strong earnings

Stock markets rallied Tuesday, helped by Chinese stimulus plans and some strong corporate earnings, traders said.

Around 1030 GMT, London's benchmark FTSE 100 index was up 0.8 percent compared with Monday's close.

In the eurozone, Frankfurt's DAX 30 jumped 1.4 percent and the Paris CAC 40 won 0.9 percent.

The dollar traded mixed, while bitcoin went back above $8,000 to reach the highest level since May.

"Stock markets are enjoying a decent move higher... receiving a dual boost in sentiment from a proposed Chinese fiscal stimulus and a better than expected set of results from Google-parent company Alphabet," said David Cheetham, chief market analyst at traders XTB.

Tensions persist over a potential global trade war, however, with European Commission President Jean-Claude Juncker heading to Washington on Wednesday to meet with US President Donald Trump and try to avert an escalation of tit-for-tat tariffs.

The US leader is already embroiled in a messy trade dispute with China and Europe, while negotiations with Canada and Mexico to revamp the North American Free Trade Agreement have stalled.

In a bid aimed at shielding China's economy -- the world's second-largest -- from a worsening trade row with Washington, Beijing on Tuesday signalled it would shift to a looser fiscal policy.

Shanghai's main stocks index jumped 1.6 percent in response, while the yuan hit a 13-month lower versus the dollar.

Chinese Premier Li Keqiang stressed the government would accelerate plans to reduce taxes by more than 1.1 trillion yuan ($160 billion) and to issue 1.35 trillion yuan in local government special bonds for infrastructure.

"The proactive move by the Chinese authorities has lifted investor confidence around the globe," said David Madden, analyst at CMC Markets UK.  

                   Earnings in focus

Focus was also on the latest round of earnings reports, with the tech sector receiving a boost from Alphabet's stronger-than-expected quarterly profits announced Monday.

Amazon and Facebook will also report their results this week.

In Europe meanwhile, shares in French car giant PSA surged 10.8 percent to 22.63 euros after the owner of Peugeot drove profits higher thanks in part to a major turnaround for its Opel Vauxhall brand.

Elsewhere Tuesday, China's state-owned China Tower -- the world's largest operator of telecommunications towers -- announced it would aim for an $8.7-billion initial public offering in Hong Kong, the biggest globally in four years.

In commodities, oil futures firmed thanks to Trump and Iranian President Hassan Rouhani engaging in a round of furious sabre-rattling.

"NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE," tweeted Trump after Rouhani warned the US leader not to "play with the lion's tail", saying that conflict with Iran would trigger the "mother of all wars".                

Oil price gains were capped however by oversupply fears.                 

"The broader macro picture continues to loom large as Saudi Arabia and Russia are expanding production to offset the loss of Iran production", said Stephen Innes, head of Asia-Pacific trading at Oanda trading group.

(APP)