Traders work on the floor of the New York Stock Exchange (NYSE). Image Credit: Reuters

London: Major global equities rose Tuesday, with sentiment soothed after Britain shredded its controversial budget and following a series of upbeat US earnings.

On Wall Street, the Dow Jones jumped two per cent at the open after a day of strong trading in Asia and Europe, as several big banks updated with healthy data.

Goldman Sachs reported lower profits in its results Tuesday - but the firm still topped analyst expectations on strong trading revenues.

It follows positive earnings news from the Bank of America on Monday, days after JPMorgan Chase and others also logged solid numbers.

"Better-than-expected US earnings reports sparked a rally on Wall Street with positive momentum reverberating across European equities," Interactive Investor analyst Victoria Scholar told AFP.

"Risk appetite is picking up after a volatile week for markets, as corporate results look to be the main driver of price action today."

Later on Tuesday, investors will also digest results from Johnson & Johnson, Lockheed Martin and Netflix.

Analysts remain hopeful that an upbeat third-quarter results season could give a shot in the arm to markets which have been slammed this year on fears over inflation and Federal Reserve interest rate hikes.

But Craig Erlam, senior market analyst at OANDA, warned the upbeat investor sentiment might not last, saying there was a "strong feeling of a bear market rally about trading over the course of the last week."

"From the post-US-inflation rebound to what has now been a strong start to the week - in part driven by the UK's decision to no longer shoot itself in the foot - nothing about this screams sustainable."

European positivity

Frankfurt stocks jumped nearly two percent on Tuesday as a key survey showed German investor confidence climbed slightly in October, but it still held at a low level.

London gains were muted after the Bank of England poured cold water on a newspaper report that it could delay the sale of government bonds again to help maintain market stability.

A BoE spokesperson described the Financial Times story as "inaccurate".

But the British pound retreated slightly after jumping Monday above $1.14 as the UK government sensationally ripped up its controversial debt-fuelled budget.

After a volatile few weeks during which the pound hit a record low, new finance minister Jeremy Hunt sought Monday to reassure investors as he scrapped tax cuts and warned of tough spending cuts.

Monday's move, which dealt a blow to Prime Minister Liz Truss's authority, sent sterling up as much as two percent at one point and the cost of government borrowing tumbled, while the FTSE 100 jumped.

"Investors continue to monitor the political and economic turbulence surrounding the UK," noted XTB analyst Walid Koudmani.

Markets in China fluctuated a day after authorities delayed the release of third-quarter economic figures, which analysts said were likely to show the weakest growth since the pandemic owing to Covid-19 lockdowns.

The decision comes as the Communist Party holds a key gathering at which President Xi Jinping is expected to be handed a third term.