World stocks split with crude, rise despite oil drop | Reuters

World stocks split with crude, rise despite oil drop
| Reuters

NEW YORK Equity markets shrugged off crude oil's decline on Thursday, with Europe rebounding from losses spurred by fears of Britain exiting the European Union and Wall Street boosted by growing investor confidence.

U.S. stock indexes advanced, buoyed by robust manufacturing data that pointed to a recovery in the struggling sector.

"Overall, the tone of the market has gotten much better in the last week, and nothing happened overnight to dent that optimism, even with China down nearly 6 percent," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

The Dow Jones industrial average rose 90.47 points, or 0.55 percent, to 16,575.46, the S&P 500 gained 7.25 points, or 0.38 percent, to 1,937.05 and the Nasdaq Composite added 4.20 points, or 0.09 percent, to 4,546.80.

"The market's Teflon capabilities continue to demonstrate themselves again today as they have in the last week such that any signs of negativity are for the most part being shrugged off," James said.

China's SSE Composite Index fell 6.4 percent, the biggest day of losses in a month. The slump in Shanghai, where markets have lost more than half their value since June, underscored a sense of caution over the world's No. 2 economy ahead of Friday's G20 meeting there.

Pressure is on the G20 leaders to get the global economy back on track and to calm markets after one of the rockiest starts to a year on record.

The IMF called on Wednesday for those countries that still have money available to help boost growth and Chinese officials, speaking as G20 delegates started to arrive, moved to ease fears about another sharp drop in the yuan.

Crude oil futures fell around 2 percent, with global benchmark Brent crude down 2.3 percent and U.S. light crude falling 1.7 percent.

Equity markets and oil prices have mirrored each other this year so far, but analysts say they expect the two to decouple in the not-too-distant future.

MSCI's gauge of global stock markets was up 0.86 percent.

Europe's FTSEurofirst 300, which has lost almost 4 percent since Tuesday, was up 2 percent as risk appetite returned.

Britain's sterling was slightly higher at $1.3944, taking a breath from a 5 percent fall since early this month on fears that a public vote on June 23 could see Britain become the first country to quit the 28-member European Union.

Dealers said there were also signs of downward pressure building on the euro ahead of next month's European Central Bank meeting, which is expected to see the bank cut rates again. Euro zone long-term inflation expectations fell to record lows on Thursday.

The dollar struggled to make much headway, however, due to doubts over whether the Fed will raise rates at all this year. The euro edged up 0.15 percent to $1.1027.

Gold erased early losses and rose about 0.85 percent to $1,240 an ounce, within sight of a one-year high of $1,260.60 reached on Feb. 11.

(Additional reporting by David Gaffen in New York, Marc Jones in London, Joshua Hunt in Tokyo; Editing by Bernadette Baum)

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

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Updated Date: Feb 26, 2016 01:15:12 IST

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