Global Markets: Stocks gain on quick economic revival hopes, oil slides
By Herbert Lash NEW YORK (Reuters) - A gauge of global equity markets rose on Monday on hopes of a fast recovery from the coronavirus economic slump while oil slid after Saudi Arabia said an extension of output cuts by producer nations would not include extra cuts by three Gulf countries. A surprisingly upbeat U.S. jobs report on Friday along with progress toward a European recovery fund, more German fiscal spending and the European Central Bank's decision last week to expand its emergency stimulus program drove recovery hopes.
By Herbert Lash
NEW YORK (Reuters) - A gauge of global equity markets rose on Monday on hopes of a fast recovery from the coronavirus economic slump while oil slid after Saudi Arabia said an extension of output cuts by producer nations would not include extra cuts by three Gulf countries.
A surprisingly upbeat U.S. jobs report on Friday along with progress toward a European recovery fund, more German fiscal spending and the European Central Bank's decision last week to expand its emergency stimulus program drove recovery hopes.
The U.S. dollar edged higher and commodity currencies gained as risk appetite ramped up. The New Zealand dollar rose to its highest in nearly four months after the government said it had stopped transmission of the coronavirus within the country.
Financial, automotive and retail-oriented and energy shares - the stocks most beaten-down since the pandemic slammed markets - led equity indices higher.
MSCI's gauge of stocks across the globe gained 0.41%, but the pan-European STOXX 600 index lost 0.32% after posting its strongest weekly gain in more than eight years on Friday. Jefferies said in a note that the German market, which fell 0.22%, "has become a tad overbought."
On Wall Street, the equity rally put the benchmark S&P 500 less than 1% away from recouping all of this year's losses.
The Dow Jones Industrial Average rose 230.87 points, or 0.85%, to 27,341.85. The S&P 500 gained 12.69 points, or 0.40%, to 3,206.62 and the Nasdaq Composite added 21.54 points, or 0.22%, to 9,835.62.
Yields on top-rated German government bonds dipped but remained near more than two-month highs hit last week on the back of improving sentiment in world markets.
U.S. Treasury yields also fell, with the 10-year note down 3.1 bases points at 0.8735%. Gold rose after a steep decline, boosted by hopes of a dovish monetary policy outlook from the Federal Reserve after the U.S. central bank ends a two-day meeting on Wednesday.
Spot gold added 0.5%.
Oil fell after the Organization of Petroleum Exporting Countries and others agreed on Saturday to sustain cuts agreed to in April that were equal to about 10% of global oil supply.
But Saudi energy minister Prince Abdulaziz bin Salman told a news conference on Monday that the kingdom and Gulf allies Kuwait and the United Arab Emirates would not cut an extra 1.18 million bpd in July as they are doing this month.
U.S. crude fell 3.24% to $38.27 per barrel and Brent was at $41.07, down 2.91% on the day.
Asia shares rose overnight in a catch-up rally following Friday's U.S. jobs data but gains were capped by Chinese data, published on Sunday, which showed exports contracted in May.
German industrial output meanwhile slumped a record 17.9% in April and firms now expect a bumpy road ahead despite a massive stimulus package.
"European stocks are probably under pressure following weak China data overnight. However, we do not think this marks the end of the rally," said Marija Vertimane, senior strategist at State Street Global Markets.
The Japanese yen strengthened 1.09% versus the greenback at 108.42 per dollar, while the euro was up 0.11% to $1.1296.
The dollar index fell 0.034%.
(Reporting by Herbert Lash and Thyagaraju Adinarayan, additional reporting by Sujata Rao; Editing by Larry King and Alistair Bell)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.