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
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 drove recovery hopes 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.
The U.S. dollar slid 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.
"The majority of investors believe the road to recovery is here," said Edward Moya, senior market analyst at currency dealer OANDA in New York. "We're possibly seeing some signs of a much quicker recovery that anyone anticipated. That's helping push the stock market."
MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.70%, but the pan-European STOXX 600 index <.STOXX> closed down 0.32% after posting its strongest weekly gain in more than eight years on Friday. Jefferies said in a note that the German market <.GDAXI>, 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 <.DJI> rose 325.9 points, or 1.2%, to 27,436.88. The S&P 500 <.SPX> gained 25.42 points, or 0.80%, to 3,219.35 and the Nasdaq Composite <.IXIC> added 81.47 points, or 0.83%, to 9,895.55.
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
Investors will be seeking clarity from Fed Chair Jerome Powell on monetary and fiscal policies, Moya said.
U.S. gold futures
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 said 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, leading prices to tumble.
Asia shares rose 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.
Marija Vertimane, senior strategist at State Street Global Markets, said European shares came under pressure following the weak Chinese data, but "we do not think this marks the end of the rally."
The Japanese yen strengthened 1.16% versus the greenback at 108.34 per dollar, while the euro
The dollar index <=USD> fell 0.12%.
(Reporting by Herbert Lash and Thyagaraju Adinarayan, additional reporting by Sujata Rao; Editing by Alistair Bell and Nick Zieminski)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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