Business & Investment

World stocks set the highest day in five months.Yields on oil and government bonds

Despite three-year high crude oil prices taking advantage of inflation risk and raising government bond yields, strong US corporate earnings reports have strengthened optimism about the economy, with Friday’s stocks on the highest day of five months worldwide. Soared.

Goldman Sachs Group, a U.S. investment bank, broke market expectations on the latest Wall Street when it reported a 66% surge in third-quarter profits thanks to a record wave of investment banking operations. bottom.

Rising prices in the US and Europe

Some analysts warned investors complacency very early in the earnings season, especially given current supply chain constraints, but US equities joined the rise in global equities on Friday. I did.

The Dow Jones Industrial Average jumped 1.1% with the highest weekly performance since June 25th. The S & P 500 rose 0.75%, recording the best week in two and a half months. The Nasdaq Composite Index rose 0.5%.

The Pan-Europe STOXX 600 Index rose 0.74% and MSCI’s global stock price rose 0.86%. This is the largest daily rise since May 14th.

Arthur Hogan, Chief Market Strategist at National Securities Corporation, said: Reported their income.

Undisturbed by news that a British lawmaker suffered a fatal puncture wound on Friday, the UK’s FTSE 100 rose 0.37% to a record high of nearly 20 months. The UK High Equity Index has recovered all lost ground since the coronavirus pandemic began last March.

Concerns that soaring crude oil prices may have dragged companies and the economy has been put off for now.

Crude oil price rises

Oil prices have surpassed $ 85 a barrel, the highest in three years, due to forecasts of oil supply shortages in the coming months amid rising demand against the backdrop of the relaxation of travel bans.

US crude recently hit a high of $ 85.10, then rose 1.13 percent to $ 82.23 a barrel, and Brent rose 0.83 percent to $ 84.70.

The bet that central banks are likely to raise interest rates faster than expected due to higher prices raised yields on government bonds, but the rise was more pronounced in the United States than in Europe.

Yields on two-year Treasuries, which reflect short-term interest rate expectations, increased from 0.354 percent on Thursday to a near-19-month high of 0.3949 percent. Benchmark 10-year Treasury yields also rose from 1.519 percent on Thursday to 1.5738 percent.

In Europe, rising inflationary pressures and signs of strong economic growth showed signs of strong economic growth, with the Bund yields declining for a decade after recording a rise for the seventh straight week.

Global currency

Backed by a bet that accelerated inflation could force the Federal Reserve to raise interest rates faster than expected, the dollar hit a three-year high against the yen, which is usually sensitive to interest rate differentials. .. I bought 114.46 yen for 1 dollar, the highest price since October 2018.

The dollar index, which measures the greenback against baskets of other currencies, was low that day, but fell 0.104%, set to the first weekly fall compared to major peers since the beginning of last month, with Sterling. The euro has little basis.

Friday’s gold price took a breather after having the best day of the previous seven months. Spot gold fell 1.6% to $ 1,766.82 an ounce, and US gold futures fell 1.67% to $ 1,766.70 an ounce.

China is slow growing

Mike Hughson, chief market analyst at CMC Markets, said the recovery of optimism will be tested by China’s weak growth data expected next week and the impact of rising oil prices on consumers in the winter months. Told.

Indeed, China’s energy crisis deepened on Friday and coal prices hit record highs.

China’s central bank official said on Friday that a rare official statement about the liquidity crisis that China’s second developer disrupted the market could control the spillover effect of China’s Evergrande debt problem on the banking system. Said that.

Asian market

MSCI’s widest non-Japanese Asia Pacific equities index rose 1.35%, the highest weekly performance since late June, up 2.1% in a week. Meanwhile, the Nikkei Stock Average in Japan surged 1.81%, driven by high-tech stocks.

China’s stocks have risen more cautiously than in other regions, with top-tier stocks outpacing next week’s growth rate by 0.38%.

Analysts attribute the rise in Asia to a backlash from the United States.

European car registrations fell by more than a quarter in September, and Toyota announced in November that it would cut global production as chip shortages and supply chain problems continued to plague the sector.

Bitcoin reached a six-month high of $ 61,895.05 on Friday as traders became more and more confident that U.S. regulators would approve the launch of exchange-traded funds under futures contracts. We are approaching a record hit in April.

World stocks set the highest day in five months.Yields on oil and government bonds

https://www.thehindubusinessline.com/markets/stock-markets/world-stocks-notch-best-day-in-5-months-oil-government-bond-yields-up/article37016451.ece World stocks set the highest day in five months.Yields on oil and government bonds

Back to top button