European stocks mostly rise as investors eye G20 meeting
NEW YORK: Brent crude oil prices hovered above $99 a barrel yesterday after surpassing $100 earlier in the session and recovering some ground after a steep six-day decline.
After a brief run-up on the back of gains in the S&P 500 stock index, oil prices retreated following a credit rating downgrade for the United Kingdom boosted the US dollar, which weighed on prices for dollar-linked commodities.
“The currency started happening first, and then commodities were starting to give it up. The UK downgrade puts dollar green, and that puts a lot of pressure on commodities priced in dollars,” said Bill Baruch, senior market strategist at iitrader.com in Chicago.
Analysts said the market seemed to be stabilising after a week of heavy liquidation in which prices tumbled from over $103 as of last Friday, along with a rout in gold and industrial metals.
Most US stocks edged higher yesterday, bouncing back a day after the S&P 500 closed below its 50-day moving average for the first time this year.
Morning’s gains in the S&P 500 initially supported a “risk-on” trade, and bargain hunters snapped up below-$100 oil, sending Brent briefly above $100 a barrel. Brent crude was up 11 cents to $99.24 a barrel by 1:26 p.m. EDT (1726 GMT), off an intraday high of $100.33 a barrel. U.S. crude rose 5 cents to $87.78.
European equities mostly rose yesterday, mirroring gains in Asia, as investors eyed the G20 summit and upcoming IMF and World Bank spring meetings focused on global economic strains.
London’s FTSE 100 index of leading companies rose 0.69 percent to 6,286.59 points, and in Paris the CAC 40 added 1.46 percent to 3,651.96 points.
Meanwhile in Frankfurt the DAX 30 slid 0.18 percent to 7,459.96 points. Milan added 1.81 percent despite political turmoil over the election of a president, while Madrid climbed 1.32 percent.
The European single currency firmed to $1.3073 from $1.3049 late in New York on Thursday. The greenback rose to 99.29 yen from 98.14 yen. “Equity markets ramped up small gains... showing a recovery from yesterday’s mediocre performance,” said analyst Brenda Kelly at traders IG.
Markets were enjoying a brighter end to the week, which started with a sell-off after China released worse-than-forecast growth data that raised concerns about the strength of the world’s number-two economy.
At the G20 meet, Japan was expected to try to reassure other finance ministers and central bank governors that it is not intentionally weakening its yen.
The Bank of Japan this month unleashed a huge stimulus package to kickstart its economy and bring an end to years of deflation. However, the move has led some to claim Tokyo is looking to give its exporters a trade advantage.
Analysts said the G20 was unlikely to voice major concern over Japan’s new policy.
“The G20 meeting is unlikely to create much activity in the markets,” noted analyst Craig Erlam at traders Alpari. “We’re probably going to see a very similar statement to the last, with the G20 committing to not using monetary policy to depreciate their respective currencies, while highlighting that they support Japan’s efforts to overcome deflation. “What this essentially means is that Japan will continue to depreciate the yen in the short term, however their actions are being monitored closely.”
US stocks traded mixed yesterday after a deluge of earnings reports gave conflicting signals about the state of the economy.
In midday trade, the Dow Jones Industrial Average eased 0.11 percent to 14,521.44 points.
The broad-based S&P 500 added 0.75 percent to 1,553.12 points while the tech-rich Nasdaq Composite Index put on 1.27 percent to 3,206.55 points.
Earnings reports from IBM and McDonalds missed expectations, while technology heavyweights Google and Microsoft outperformed analyst forecasts.
Asian equities won back ground yesterday at the end of a tough week for global equities and commodities, with investors brushing off a second straight loss on Wall Street, while gold prices also continued to recover. Hong Kong stocks rallied 2.33 percent and Shanghai jumped 2.14 percent, while Tokyo rose 0.73 percent, Seoul was 0.35 percent higher and Sydney climbed 0.15 percent. Gold rallied to $1,405.50 an ounce on the London Bullion Market from $1,393.75 on Thursday. The precious metal had struck a two-year low at $1,321.95 on Tuesday after news of weaker-than-expected first-quarter economic growth in key commodity consumer China.
Agencies
