Saturday 21 October 2017

Oil price recovery lifts global markets

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York

World stock markets edged higher yesterday, buoyed by a modest rebound in oil prices after the commodity hit 10-month lows, while the US yield curve managed to stall its recent flattening.

Oil edged up from November lows hit in the prior session, when US crude hit its lowest intraday level since August 2016. Sentiment remained negative from a supply glut that has persisted despite Opec-led efforts to balance the market.

US crude rose 0.75pc to $42.85 per barrel and Brent was last at $45.32, up 1.12pc on the day.

"Oil's had a tough run in the last handful of weeks," said Michael Scanlon, managing director, portfolio manager at Manulife Asset Management in Boston.

"I wouldn't say oil being up today gives anybody a high degree of confidence we've seen a floor in oil yet," he said.

With the gains, the energy sector in Europe remained under pressure, down 0.3pc, but managed to close well off earlier lows. The index is down nearly 2pc on the week and is on track for its fifth straight weekly drop.

Those declines weighed on European shares but the picture was reversed on Wall Street, with energy up 0.1pc.

The Dow Jones Industrial Average rose 28.03 points, or 0.13pc, to 21,438.06, the S&P 500 gained 4.62 points, or 0.19pc to 2,440.23 and the Nasdaq Composite added 18.51 points, or 0.3pc, to 6,252.46.

Healthcare was up 1.4pc to pace the advance on Wall Street as Senate Republicans unveiled a draft bill to replace the Affordable Care Act.

The pan-European FTSEurofirst 300 index rose 0.05pc to snap a two-session skid and MSCI's gauge of stocks across the globe gained 0.22pc. Oil's decline has hurt energy stocks and curbed investor expectations for higher inflation.

Reuters

Also in Business