Berliner Boersenzeitung - Stocks climb as US rate cut hopes counter political shakeups

Tokyo's Nikkei briefly spiked to a new record before ending lower amid hopes that whoever replaces Prime Minister Shigeru Ishiba will unveil a fresh round of economic stimulus.

Japan's ruling Liberal Democratic Party will pick its new leader on October 4, replacing Ishiba, who resigned at the weekend after huge election setbacks.

In Paris, the CAC 40 index moved higher after Prime Minister Francois Bayrou submitted his resignation to President Emmanuel Macron after parliament ousted his government.

Bayrou on Monday suffered a crushing loss in a confidence vote he called, seeking support for over 40 billion euros ($47 billion) in budget cuts to rein in France's debt.

France's borrowing costs briefly exceeded those of traditional European debt-laggard Italy on Tuesday, ahead of an update on the country's credit rating from Fitch on Friday.

However, with Paris stocks rising, "for now, the market impact seems limited", said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

For Holger Schmieding, chief economist at Berenberg bank, "a genuine financial crisis with a self-reinforcing doom loop (higher yields = bigger deficits = even higher yields...) remains quite unlikely for the time being".

Gold, an investment haven in uncertain times, extended its record run, hitting an all-time high of $3,694 an ounce.

The Nasdaq hit a record high on Monday, "helped by expectations of lower Fed rates", Ozkardeskaya said.

Last month's big miss on US jobs creation raised concerns about the strength of the world's top economy but it has stoked bets that the US Federal Reserve will loosen monetary policy, even as inflation remains stubbornly above its target.

Investors are awaiting the release of fresh data on prices this week to get a better idea about the Fed's next move, with Bloomberg reporting that expectations are for three quarter-point reductions before the end of the year.

- Mining merger -

On the corporate front, British mining group Anglo American and its Canadian peer Teck Resources announced plans for a multi-billion-dollar merger, creating a champion of copper production and other critical minerals.

Anglo American shares jumped 10 percent in London deals on Tuesday, while Teck's stock surged over 16 percent in early trading on the New York Stock Exchange. Shares in rival miners jumped on their coattails.

Indonesian stocks and the rupiah tumbled after President Prabowo Subianto removed Finance Minister Sri Mulyani Indrawati in a cabinet reshuffle following fatal anti-government protests across the country.

- Key figures at around 1340 GMT -

New York - Dow: UP 0.1 percent at 45,563.48 points

New York - S&P 500: UP 0.1 percent at 6,504.43

New York - Nasdaq: UP 0.2 percent at 21,836.85

London - FTSE 100: UP 0.2 percent at 9,236.73

Paris - CAC 40: UP 0.2 percent at 7,752.99

Frankfurt - DAX: DOWN 0.5 percent at 23,680.39

Tokyo - Nikkei 225: DOWN 0.4 percent at 43,459.29 (close)

Hong Kong - Hang Seng Index: UP 1.2 percent at 25,938.13 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,807.29 (close)

Euro/dollar: DOWN at $1.1749 from $1.1760 on Monday

Pound/dollar: UP at $1.3563 from $1.3549

Dollar/yen: DOWN at 146.80 from 147.43 yen

Euro/pound: DOWN at 86.44 pence from 86.80 pence

Brent North Sea Crude: UP 1.5 percent at $67.03 per barrel

West Texas Intermediate: UP 1.5 percent at $63.20 per barrel

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(A.Lehmann--BBZ)