Market update: Another surge in US shares while Asia and Europe play cautiously

US shares were up on Tuesday (Dow Jones +0.6%, S&P 500 +0.5%) led by health care stocks, which received a boost to their earnings as a planned cut in government payments for private Medicare Advantage insurers did not materialise. Humana shares rose the most (+5.5%) since two-thirds of the company’s revenues come from the Medicare Advantage business. Helping the mood, February’s US factory orders came in above expectations, and at the highest for five months, pointing to a steadily improving economy.

Overnight trading in Asia has been mixed. Japanese shares gained the most with the Nikkei 225 rising 3% as the rise in US factory orders helped exporters, while investors anticipated aggressive monetary easing measures from the Bank of Japan as it started its two-day policy setting meeting. In China, decent manufacturing data helped shares move up for the first time this week, although by the end of the day the main index, Shanghai Composite, was down 0.1%. Meanwhile geopolitical tensions sent the Korean won to a six-month low versus the US dollar. European shares were softer in early trading this morning following the Asian trading pattern (FTSE Eurofirst 300  0.2%, FTSE 100  0.5%) while markets await the outcome of central bank meetings and US payrolls numbers later this week.