New York: World equity markets climbed to approach a four-week high on Wednesday, as investors’ appetite for the riskier asset was boosted by upbeat earnings from companies in Europe and the United States.
The US dollar clung to gains amid fading concerns over a global trade war, while a reported decline in US crude inventories and the possibility of supply disruptions pushed oil prices higher.
MSCI’s gauge of stocks across the globe was up 0.56 per cent, the highest since March 21, and on track for a third straight session of gains.
The index was supported by a higher open on Wall Street on Wednesday, following the latest batch of earnings. Morgan Stanley shares rose 3 per cent after the bank reported a 40 per cent jump in quarterly profit, driven by its trading business.
“Earnings continue to progress on the positive side and commodities are also on the rise, that should give the markets another boost,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Investors appeared to be focusing on fundamentals after weeks dominated by geopolitical tensions.
“The safety trade that we have experienced seems to have ended,” said Cardillo.
Shares of International Business Machines Corp tumbled 7.3 per cent after its profit margins fell short of Wall Street expectations.
The Dow Jones Industrial Average rose 12.93 points, or 0.05 per cent, to 24,799.56, the S&P 500 gained 9.17 points, or 0.34 per cent, to 2,715.56 and the Nasdaq Composite added 25.05 points, or 0.34 per cent, to 7,306.15.
European shares firmed amid strong company results, including those from French food group Danone, private health care provider Mediclinic and Dutch oil and chemical storage company Vopak.
Europe’s broad FTSEurofirst 300 index was up 0.32 per cent at 1,496.62.
The US dollar held steady versus a basket of major currencies as solid company results and fading concerns about a trade war helped keep a lid on safe-haven demand for the greenback.
Basket of currencies
The dollar found support from relatively stronger economic data than those seen in Europe and other developed markets.
The dollar index, which measures the greenback against a basket of six major currencies, was 0.07 per cent higher at 89.58.
Trading across US government bond maturities was rangebound on Wednesday, with yields little changed in spite of gains in the equity market.
“The reaction in the bond market seems to be a lot more muted relative to the big moves we’ve seen in the equities rally in the past few sessions. Generally, the bond market seems to be under-reacting to both the sell-off and the rally,” said Subadra Rajappa, head of US rates strategy at Societe Generale in New York.
The US 10-year note was down 9/32 in price to yield 2.8469 per cent, up from a yield of 2.814 per cent on Tuesday.
Oil extended gains, rising more than $1 on a reported decline in US crude inventories and after sources signalled top exporter Saudi Arabia wants to see the crude price closer to $100 a barrel.
Brent crude oil futures were 1.9 per cent higher at $72.95 a barrel, while US. WTI crude futures were up 2.2 per cent at $68.06.
Gold prices rose to a one-week high on technical trading and as the dollar held steady. Spot gold was up 0.3 per cent at $1,351.01 an ounce.
