Global Stocks Steady -- Update
July 01 2016 - 5:51AM
Dow Jones News
By Riva Gold
Global stocks were steady at the start of the third quarter amid
hopes that central banks would remain supportive following the
U.K.'s vote to exit the European Union.
The Stoxx Europe 600 inched up 0.2% in morning trade, building
on its largest three day percentage gain since November 2011. Bank
of England Gov. Mark Carney signaled Thursday that further
interest-rate cuts will be needed following the U.K.'s June 23
referendum, boosting stocks while pressuring the British pound.
London's export-oriented FTSE 100 index rose 0.4%, on track for
its best week since 2010.
The auto sector led gains in broader European equity markets on
Friday, with shares of Volkswagen AG up 4.6%.
News reports that the European Central Bank is considering
loosening its rules for bond purchases have also been supportive in
recent sessions, helping Spanish and Italian bonds gain
sharply.
"If these reports are confirmed, this removes the risk of a
post-referendum spike in peripheral bond spreads," strategists at
Deutsche Bank wrote in a note. Still, the bank says, other "Brexit"
risks for European equities remain, including weakness in European
banks and the chance of further dollar strength.
Futures markets pointed to a small opening loss for the S&P
500, which closed out Thursday with its fourth consecutive month of
gains.
Outside Europe, "most countries are going on business as usual,"
said Peter Marber, head of emerging markets at Boston-based fund
Loomis Sayles & Co. "People have already begun to forget about
Brexit," he said.
In currencies, the pound was down 0.3% against the dollar at
$1.3305. The euro was down 0.1% against the dollar at $1.1099,
while the dollar fell 0.6% against the yen to Yen102.5230.
Asian markets largely advanced as a strong close on Wall Street
and in Europe rippled overseas. Japan's Nikkei Stock Average added
0.7%, while shares in Australia added 0.3%.
Stocks in Shanghai inched up just 0.1% after two gauges of
Chinese manufacturing activity weakened Friday, suggesting
second-quarter growth may be slower than the first. Still, the
services sector improved, reassuring some investors about the
health of the world's second-largest economy. Markets in Hong Kong
were closed.
In commodities, gold gained 1.3% to $1,337 an ounce.
Brent crude oil fell 0.4% to $49.53 a barrel. While oil prices
have recovered in recent sessions, "a cloud of political
uncertainty has covered the European continent, warranting a sharp
reduction in global economic growth and global oil demand
expectations," strategists at Barclays wrote in a note.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
July 01, 2016 05:36 ET (09:36 GMT)
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