GLOBAL MARKETS-Dollar soars to 16-month high, stocks rebound after CPI scare

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* Dollar rises to 16-month high on earlier rate hikes

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*Rebound in equity market on strong earnings outlook

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* US CPI rises at fastest pace since 1990, market stir

* China avoids Evergrande default, helps lift markets

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* Graphic: Global Asset Display Graphic: World FX Rates

NEW YORK/LONDON, Nov 11 (Businesshala) – The dollar rose on Thursday, hitting a 16-month high a day after its strongest inflation reading in more than three decades, as currency markets raised US interest rates next year. while equities were at higher levels. , with stock investors rosy on earnings outlook.

The UK’s blue-chip stock index rose to a 20-month high as miners heaved a sigh of relief that property developer China Evergrande averted a default. European stocks rose after Goldman Sachs said earnings have been resilient to supply chain snags.

The dollar index, which gauges the currency against six peers including the yen and the euro, rose further on Thursday. The greenback had its biggest daily jump since March following US consumer price data on Wednesday.

The CPI posted its biggest monthly gain in four months to push the annual increase in inflation to 6.2%, the strongest year-on-year increase since November 1990.

The dollar pushed the euro below $1.15, causing it to drop to the next major chart support level at $1.12. Sensing the potential to boost competitiveness, European stocks shrugged higher, but the Japanese yen slipped to a four-year low of 114.15 per dollar.

“Inflation is not always a bad thing for the equity market,” said Don Townswick, director of equity strategies at institutional asset manager Conning. “Tightening usually happens when the economy is doing really well, so the prospect of just a few higher interest rates isn’t a problem.”

MSCI’s all-country world index rose 0.19% and the broader STOXX Europe 600 index rose 0.24%.

On Wall Street, the Dow Jones Industrial Average rose 0.20%, the S&P 500 0.21% and the Nasdaq Composite up 0.78%.

Stock markets in China and Japan also rose. China’s markets were backed by asset giant Evergrande to avoid default again and Beijing is expected to extend support to the broader sector. The Nikkei was supported by a weaker yen, which helped exporters.

Chinese blue chips rose 1.6%. Evergrande jumped about 7%. Japan’s Nikkei closed up 0.6%, while the yen weakened to 114.15 per dollar from a strong level of 112.73 earlier this week.


CEO Elon Musk said Tesla gained 0.8% to recover some of the 12% it lost after selling nearly $5 billion of its shares in the electric car maker it founded.

Walt Disney fell nearly 7.6% to lead the decline among Dow constituents, as it reported the smallest increase in Disney+ subscriptions since the service’s launch and posted downbeat profits at its theme parks.

Gold prices hit a five-month high in the previous session as investors sought a hedge against inflation. On Thursday, gold touched a five-month high of $1,868.20 overnight, before falling around $1,862.

Oil climbed above $83 a barrel in volatile trade, recovering from a sharp fall from inflation concerns as the Organization of the Petroleum Exporting Countries cut its 2021 oil demand forecast due to rising energy prices.

Brent crude rose $0.42 to $83.06 a barrel. US crude rose $0.59 to $81.93 a barrel.

Bitcoin set a new all-time high at $69,000 and then dropped back to around $64,860.

Reporting by Herbert Lash, Additional reporting by Mark Jones in London, Kevin Buckland in Tokyo, Editing by Timothy Heritage, Chizu Nomiyama and David Gregorio


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