- Gains in Europe as stocks offset steady Asia weakness
- Futures point to a bounce in Wall Street following Tech Route
- Brent crude hits 3-year high after OPEC+ move
- US dollar strengthens ahead of payroll test
MILAN, Oct 5 (Businesshala) – World stocks held steady near lows on Tuesday as rising oil prices will ease inflationary pressures, while the dollar strengthened on Friday ahead of US payrolls data that was provided by the Federal Reserve. Seen as the key to the next step. .
MSCI’s gauge of global shares (.MIWD00000PUS) slipped 0.04% by 1150 GMT, but was higher than a three-month low during Asian trade.
European shares (.STOXX) gained 0.8% as rising bank stocks and an encouraging earnings update from chipmaker Infineon calmed nerves after a tech-fueled sell-off on Monday.
Wall Street was also set for a rebound with futures up 0.5% on both the tech-heavy Nasdaq and S&P 500.
Asian stocks fell for the third day in a row, with heavy losses in the United States, where investors gave up on Big Tech as Facebook (F.B.O) was hit by a nearly six-hour outage.
Its stock rose more than 1% in US pre-market trade after Facebook’s services came back online.
But investors remained cautious, on concerns that rising energy prices and supply chain disruptions could derail economic recovery, as the US Federal Reserve moves closer to easing its massive stimulus.
“More than anything else, we are concerned about the impact of inflation on the general indices, which is enormous,” said Giuseppe Cerselle, fund manager at Anthelia.
“We certainly prefer energy and materials, and we’re concerned about stocks with high multiples that know the price—what’s driving earnings growth (see Nasdaq),” he said.
Banks (.SX7P), which benefit from tighter monetary policy, were among the strongest gainers in Europe, rising more than 2%.
Analysts at JPMorgan reaffirmed their overweight outlook on European lenders, citing accelerating inflation and expectations of higher bond yields.
Oil prices rose to a three-year high in London, boosting gains from the previous session, when the world’s major oil producers announced they had decided to put a cap on the supply of crude.
OPEC+ on Monday confirmed that it will stick to its current production policy as demand for petroleum products has picked up, despite pressure from some countries to give a big boost to production.
Brent crude rose 1.3% to $82.31 a barrel, while US oil rose 1.2% to $78.51.
“OPEC+ could inadvertently push oil prices even higher, triggering an energy crisis, mainly reflecting very tight gas and coal markets,” said Vivek Dhar, commodity analyst at Commonwealth Bank of Australia. “
“This potentially threatens the global economic recovery, just as global oil demand is picking up, as economies reopen due to rising vaccination rates,” Dhar said.
Market focus in Asia was on whether property developer China Evergrande (3333.HK) would offer any relief to investors looking for signs of property settlement.
Trading in shares of the world’s largest indebted developer was halted on Monday, but other Chinese property developers were battling a rating downgrade due to concerns about their ability to repay debt.
The US dollar moved towards a one-year high versus key peers ahead of a major payroll report at the end of the week, which could boost the case for the Fed to launch stimulus stimulus as soon as next month.
“A positive number, which in this case would be in the region of 480,000 or higher, would give the Fed the final reason needed to begin tapering off its asset purchase program,” said ActiveTrades analyst Ricardo Evangelista.
The dollar index, which tracks the greenback versus a basket of six currencies, was last up 0.1% at 93.9, while the euro fell 0.16% to $1.1602.
Bitcoin rose above the $50,000 mark for the first time in four weeks, adding to a series of gains since the beginning of October. It was up 1.6% that day.
Gains in the dollar weighed on gold prices, which fell 0.7% to $1,757 an ounce on Monday after hitting an all-time high since September 23.
US bond yields rose to recent highs amid caution about the need to raise the government’s debt limit as the country faces the risk of a historic default in two weeks.
The ten-year Treasury yield rose 1.7 basis points to 1.498%.