Global stocks extended their rally into a third day on Wednesday, as oil edged up from 11-year lows and the dollar eked out minor gains in trade – gradually winding down for the end of the week break.
European shares rose on the last full trading day before the break, following the lead of Asian bourses. The pan-European FTSEurofirst 300 index rose 1.5 percent, led by mining companies which rallied on higher copper prices. London-listed mining companies Glencore and Anglo American both rose more than 4 percent. “We think commodities are due for a bounce, and that should help mining stocks,” HED Capital managing director, Richard Edwards, said.
The MSCI investment analysis company’s broadest index of Asia-Pacific shares outside of Japan, rose 0.6 percent – to the highest level in almost two weeks. Japan was excluded because Tokyo markets were closed in honor of the Emperor’s Birthday holiday. MSCI’s all-country world stocks index was up 0.36 percent, though it is down 4.5 percent for the year.
In China, the blue-chip CSI 300 index broke a four-day winning streak and closed, down 0.3 percent, while the Shanghai Composite index ended, down 0.4 percent.
China’s state news agency Xinhua said slashing the country’s excess steel capacity would be a top priority for the government over the next five years.
Equity investors were encouraged after gains of 1 percent in the Dow Jones industrial average lifted Wall Street for a second day on Tuesday.
Data on Tuesday showed U.S. economic growth in the third quarter down slightly, to a 2.0 percent annual pace – but this still beat the forecasts.
Oil prices struggled to lift from lows reached earlier in the week. Brent crude, the global benchmark, stood at $36.50 a barrel, up 39 cents, having reached an 11-year low of $35.98 late on Tuesday.
The dollar strengthened versus the euro and held broadly steady against a basket of major currencies.
The euro fell 0.3 percent to $1.0922, while the Japanese yen was barely changed at 120.97 per dollar.
The euro has performed well this year due to risk aversion, as investors have unwound carry trades in which the euro is borrowed and then sold for higher-yielding currencies. “When you are in an environment where rate expectations are stable, the euro is mostly driven by risk sentiment,” said Credit Agricole currency strategist Manuel Oliveri in London.”So we could imagine that the euro goes to $1.10 or so into the end of the year.”
Yields on low-risk government bonds were little changed. German 10-year Bunds, the eurozone benchmark, yielded 0.61 percent, up 1 basis point on the day.
Ten-year U.S. Treasuries yielded 2.239 percent, unchanged from Tuesday’s close in New York.
Gold traded at $1,071.60 an ounce.