Global Markets - World stocks climb; sterling steady ahead of May vote

By Caroline Valetkevitch NEW YORK (Reuters) - Major world stock indexes rose on Wednesday, with the S&P 500 supported by gains in U.S. bank stocks after strong earnings, while the pound was steady ahead of a no-confidence vote in British Prime Minister Theresa May's government.

Reuters January 17, 2019 01:05:13 IST
Global Markets - World stocks climb; sterling steady ahead of May vote

Global Markets  World stocks climb sterling steady ahead of May vote

By Caroline Valetkevitch

NEW YORK (Reuters) - Major world stock indexes rose on Wednesday, with the S&P 500 supported by gains in U.S. bank stocks after strong earnings, while the pound was steady ahead of a no-confidence vote in British Prime Minister Theresa May's government.

Investors saw potential for legislative deadlock forcing London to delay its departure from the European Union following the parliamentary defeat of May's Brexit deal late Tuesday. The no-confidence vote is expected at 1900 GMT.

May is expected to survive the vote, sponsored by the main opposition Labour Party. Expectations of a softer Brexit - perhaps incorporating the Labour Party's idea of membership of a permanent customs union - gave some support to the pound.

Sterling was last trading at $1.2858, flat on the day.

"We do think it is unlikely that sterling will fall to fresh lows unless the current government falls, and that is unlikely although the risk is not zero," said Alvin Tan, an FX strategist at Societe Generale in London.

Stocks had mostly priced in the Tuesday Brexit vote's defeat and traded higher. The pan-European STOXX 600 index <.STOXX> rose 0.54 percent and MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.23 percent.

On Wall Street, strong earnings from Bank of America and Goldman Sachs helped to keep stocks in positive territory. Bank of America shares were up more than 7 percent while Goldman's stock was up about 8 percent.

"There is hope for this earnings season, and Goldman Sachs and Bank of America have got it started off on the right foot," said Jake Dollarhide, chief executive officer at Longbow Asset Management in Tulsa, Oklahoma.

The Dow Jones Industrial Average <.DJI> rose 142.94 points, or 0.59 percent, to 24,208.53, the S&P 500 <.SPX> gained 8.47 points, or 0.32 percent, to 2,618.77 and the Nasdaq Composite <.IXIC> added 16.81 points, or 0.24 percent, to 7,040.65.

The dollar rose against the euro as the euro zone single currency was pushed lower by worries about the zone's economy, with the euro down 0.09 percent to $1.1404.

Earlier this week, data showed Germany barely escaped a recession in the second half of 2018 and European Central Bank chief Mario Draghi warned on Tuesday the euro zone economy was weaker than anticipated.

In sovereign debt markets, British government bonds underperformed versus German peers in early trade.

U.S. Treasury yields rose as stronger-than-forecast results from two major banks lifted Wall Street, reducing safe-haven demand for U.S. government debt.

Benchmark 10-year notes last fell 4/32 in price to yield 2.72 percent, from 2.708 percent late on Tuesday.

Oil prices steadied after climbing about 3 percent in the previous session, with data showing growing U.S. refined product inventories and record crude production.

Brent crude futures rose 3 cents to $60.67 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 28 cents to $51.83.

(Additional reporting by Tom Wilson in London and Medha Singh in Bengaluru; Editing by Mark Heinrich and James Dalgleish)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

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

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

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.