Wednesday 21 November 2018

US stocks rebound as bad month ends

 

'Facebook jumped, General Motors rallied and T-Mobile US advanced.' (stock picture)
'Facebook jumped, General Motors rallied and T-Mobile US advanced.' (stock picture)

US stocks rallied on the final day of one of the worst months of the bull market, as earnings from Facebook jolted tech shares higher.

The S&P 500 Index was headed for the first back-to-back gains of October, paring its steepest monthly drop since 2011 to 7pc.

Strong earnings that had largely been ignored in prior days added to the gains. Facebook jumped, General Motors rallied and T-Mobile US advanced.

The FANG cohort surged, with Netflix jumping 8pc.

Private payrolls data calmed nerves about the strength of the economy, lifting the dollar.

In Europe, miners and energy companies led the way as almost every sector on the Stoxx Europe 600 Index climbed.

Italian bonds bucked a decline as the risk-on mood sent core European debt lower.

Eurozone inflation accelerated in October and underlying price pressures increased, handing policy makers a headache after growth data disappointed.

Equity bulls will be hoping this rebound can last following a series of bounces in the past few weeks that quickly gave way to declines as some $8trn (€7trn) was wiped off stock markets. Globally, the MSCI All-Country World Index has dropped more than 8pc in October, poised to post the worst monthly performance since May 2012.

Corporate results may be key to sustaining the share gains, but there are risks in the background, from the American midterm elections to trade talks with China.

Elsewhere, gold fell and oil edged up from a two-month low. In emerging markets, the Indian rupee pared a drop after the finance ministry moved to diffuse growing tensions with the central bank.

In Dublin, the Iseq index of Irish shares was up almost 1pc yesterday afternoon.

Providence Resources led the gainers, probably fuelled by strong backing from Government for Irish oil and gas exploration.

CRH had another strong day, rising 3.5pc.

In Asia, China's overnight repo rate surged the most in more than four years as authorities take steps to combat bets against the yuan, which held near the weakest level in a decade against the dollar. The yen edged lower after the Bank of Japan left its monetary stimulus unchanged.

Indo Business

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