Stock markets rise but Netflix sinks

Investors followed developments in the Ukraine war and business earnings, with Netflix shares falling as the streaming giant announced a drop in subscribers.

Oil prices rose marginally after falling the day before due to supply concerns.

“The upbeat market mood which helped Wall Street close firmly higher yesterday has followed through into Europe,” City Index senior market analyst Fiona Cincotta told AFP.

Frankfurt won 1.2 percent and Paris rose 1.4 percent, aided by news of a return to growth in eurozone industrial output in February.

London was barely in the green, however, as drops in industrial metals prices hit mining shares.

Europe equities and oil had dropped Tuesday as Moscow launched its eastern offensive and after the International Monetary Fund slashed its global 2022 economic growth forecasts by 0.8 percentage points, largely over inflationary crises linked to the Ukraine war and the coronavirus pandemic.

“Whilst the Russian war remains a key driver in the markets, the bad news has been priced in for now,” Cincotta said.

“Instead, some areas of optimism are arising with banks outperforming after the ECB (European Central Bank) soothed nerves with news that all big banks in the eurozone can withstand Russian write-offs,” she added.

Wall Street opened higher following Tuesday’s rally on promising housing-starts data and solid earnings, with the Dow adding 0.7 percent.

But Netflix shares slumped after the streaming giant reported its first drop in quarterly subscriptions in a decade, blaming the quarter-over-quarter erosion to suspension of its service in Russia due to Moscow’s invasion of Ukraine.

“There is no two ways to look at it, Netflix was a shocker and is likely to take the wind out of the Nasdaq’s recent rally, or at least put it on pause,” Cincotta said.

The Nasdaq Composite rose 0.4 percent as trading got underway, however.

“That said, broadly speaking earnings season has been reasonably solid so far, economic data hasn’t revealed any major cracks either, which is helping to keep risk sentiment buoyant,” she added.

In Asia trading, concerns about China’s economy hit trading in Shanghai and Hong Kong.

Shanghai’s main stocks index was Asia’s biggest faller, losing 1.4 percent as the People’s Bank of China (PBoC) kept key lending rates unchanged amid uncertainty over the impact of ongoing Chinese Covid restrictions.

Hong Kong  which plummeted on Tuesday over concerns about Beijing’s ongoing tech-sector crackdown also ended down.

“PBoC policymakers realise the futility of cutting rates during a lockdown as policies incentivising lending will have minimal a short-term positive impact on activity so long as mobility restrictions remain in place,” noted independent analyst Stephen Innes.