Business World

Monday 16 July 2018

European stocks in slight advance as US on holiday

A boy rides a decorated bicycle down Main Street during the annual Fourth of July parade in Barnstable Village on Cape Cod, Massachusetts, U.S. REUTERS/Mike Segar
A boy rides a decorated bicycle down Main Street during the annual Fourth of July parade in Barnstable Village on Cape Cod, Massachusetts, U.S. REUTERS/Mike Segar

European stocks ended fractionally higher while futures for the S&P 500 advanced in a lacklustre trading session overshadowed by the US holiday. The mood in Asia was more downbeat, and shares slipped even as the yuan extended a rebound.

Telecom companies were the biggest winners on the Stoxx Europe 600 Index, though declines in technology shares helped offset the move. Trading volumes were more than 40pc below the 30-day average. Asian shares notched further losses even as China's currency rose for a second day, though it pared some gains after a Reuters report that the central bank is comfortable with a weaker yuan. The yen nudged higher and the euro slipped, while the pound rose on data showing the UK's services sector grew at the fastest pace in eight months in June.

While the People's Bank of China yesterday gave assurances that the yuan won't be weaponised, government trade restrictions and market intervention remain key themes. The latest tit-for-tat moves include a Chinese court temporarily banning chip sales by an American tech firm, while tariffs on goods flowing the other way come into effect tomorrow. With US markets shut for Independence Day, the focus is shifting to a busy end to the week, when minutes from the last Federal Reserve meeting and jobs numbers are due.

The move in the yuan set a gauge of developing market currencies on course for the first back-to-back gains in a month, while the MSCI Emerging Market Index of stocks headed for a third consecutive decline.

Oil held steady near $74 a barrel in New York as Saudi Arabia's pledges to boost supply assuaged concerns of a shortage, while a decline in crude stockpiles in the US inflamed them.

The American Petroleum Institute was said to report that inventories dropped by 4.51 million barrels last week, while a Bloomberg survey also estimated a decline. The Saudi cabinet confirmed the kingdom is ready to use its spare capacity as needed, while energy minister Khalid Al-Falih reiterated with Russia that Opec's agreement with allies is to boost output by a million barrels a day.

Oil is trading near levels last seen in 2014 as supply disruptions from Libya to Canada and Venezuela are seen outweighing output gains from OPEC.

(Bloomberg)

Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business