🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

GLOBAL MARKETS-Shares hit 1-month high; dollar, yen firm

Published 07/17/2009, 04:43 AM
Updated 07/17/2009, 04:48 AM
C
-
BAC
-
BARC
-
SOGN
-

* Global stocks hit one-month high on corporate results

* Markets await results from Citigroup, General Electric

* Dollar, yen firm against major currencies

By Atul Prakash

LONDON, July 17 (Reuters) - World stocks hit a one-month high on Friday on growing optimism that the earnings season may turn out to be better than expected, while investors set their eyes on giants such as Citigroup for clearer market trend.

European shares recorded a fifth straight day of gains, with the FTSEurofirst 300 index of top European shares rising 0.5 percent. Britain's FTSE100, Germany's DAX and France's CAC-40 climbed between 0.5 percent and 0.9 percent.

Reassuring quarterly earnings from JPMorgan, Goldman Sachs and Intel have boosted hopes about an economic recovery, although there were signs of some caution on bond and currency markets ahead of results from Bank of America, General Electric and Citi.

MSCI global equities index, which has gained 6.5 percent so far this week on corporate earnings results, was up 0.2 percent after touching its highest level since June 15. Emerging stocks also hit a one-month peak.

"The markets have been given a much needed shot in the arm by the encouraging set of numbers coming out from the banking sector," said Owen Ireland, analyst at ODL Securities in London.

"Whilst confidence levels can often be about perception, the reality is that we have seen a consistent set of results from some of the worlds' largest institutions."

Banks were among top gainers, with HSBC, Barclays, Lloyds, BNP Paribas and Societe Generale gaining from 0.1 percent to 1.5 percent.

U.S. stocks rallied for a fourth day on Thursday after strong results from major U.S. bank JPMorgan. Japan's Nikkei closed up 0.6 percent on Friday, but gains were capped by political uncertainty ahead of an election next month.

Some analysts said that it was too early to be overly optimistic about the global economy as data was still ringing warning bells and some companies face a liquidity crunch.

A survey showed on Thursday that factory activity in the U.S. Mid-Atlantic region contracted for a 10th consecutive month in July, posting a worse than expected decline.

CIT Group Inc was in discussions on Thursday with potential lenders to secure financing, after the collapse of rescue talks with the government left the 101-year-old U.S. lender to hundreds of thousands of small and medium-sized businesses on the brink of bankruptcy.

"The market is looking for good news and it is interpreting everything as good news. Whether it is interpreting it correctly, I am not too sure," said Justin Urquhart Stewart, director at Seven Investment Management.

DOLLAR FIRM, OILS SLIP

The dollar and yen were firmer against other major currencies, reflecting caution about corporate earnings. The euro was down 0.4 percent at $1.4090 and down 0.5 percent at 131.95 yen.

Euro zone government bond futures pushed higher, catching a bid after bomb blasts ripped through hotels in Indonesia and as investors fretted about the possible bankruptcy of CIT Group.

Strategists, however, see the bond market losing some momentum as European equities rose.

"Obviously we had a bounce back yesterday on the back of data and CIT news and that flowed through today given events in Indonesia," said Sean Maloney, interest rate strategist at Nomura in London.

"We have seen a little bit of safety bid but not sure there's going to be a lot to push it higher ... We have a lot of earnings coming out from the U.S. today and that's going to be the main focus," he said.

The Bund future was 28 ticks up at 121.76 compared with 121.48 at Thursday's settlement close. In the cash market, 10-year Bunds yielded 3.331 percent, up slightly from levels in late Thursday trade.

Oil fell 0.6 percent to trade below $62 barrel, but was on course to rise about 2.8 percent this week.

Spot gold was steady after dropping in the previous session, but key base metals traded lower. (Additional reporting by Emelia Sithole-Matarise, Dominic Lau and Tamawa Desai; editing by Patrick Graham)

(To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the MacroScope Blog click on http://blogs.reuters.com/macroscope; for Hedge Hub click on http://blogs.reuters.com/hedgehub)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.