World stock markets rise after wild week

Published: December 29, 2018 12:12:07 | Updated: January 26, 2019 15:05:49

File Photo (Collected)

World stock markets rose on Friday, investors gravitated to safe-haven assets as worries about the world economy persisted, cutting short a two-day rebound in US stocks.

US stocks see-sawed, making it difficult for world equity indexes to end one of the most brutal December selloffs in memory on a high note.

At midday the Dow Jones Industrial Average rose 43.89 points, or 0.19 per cent, to 23,182.71, the S&P 500 gained 6.85 points, or 0.28 per cent, to 2,495.68 and the Nasdaq Composite added 21.03 points, or 0.32 per cent, to 6,600.53, reports Reuters.

The pan-European FTSEurofirst 300 index rose 1.85 per cent and MSCI’s gauge of stocks across the globe gained 0.58 per cent to bring the global benchmark to a weekly gain over 1.0 per cent.

Markets have swung wildly in a week shortened by the Christmas holiday. But even a late Santa Claus rally will do little to salve the 8 per cent declines for the MSCI index this month and a year that brought gains for very few categories of financial assets, from stocks to bonds and commodities.

The dollar index fell 0.1 per cent, with the euro up 0.1 per cent to $1.1441 and Japanese yen strengthening 0.57 per cent versus the greenback at 110.39 per dollar. The greenback is down about 0.9 per cent this month.

That has boosted gold, a traditional safe haven whose appeal this year was hit by a stronger dollar, which makes the metal more expensive to buyers with other currencies. The metal is perched at six-month highs of $1,279.18 an ounce.

In Europe, German annual inflation slowed sharply in December, while in the United States, National Association of Realtors data showed contracts to buy previously owned homes fell unexpectedly in November, the latest sign of weakness in the US housing market.

US Treasuries did not see a huge flight-to-safety move. Bonds have been helped in recent weeks by risk aversion, but also face a glut of supply as the US government finances its growing deficit.

Short and medium-term bonds were little changed on Friday. The 30-year Treasury bond last fell 6/32 in price to yield 3.0383 per cent, from 3.029 per cent late on Thursday.

US crude oil futures managed to lift a bit further off 2-year lows after a near-40 per cent decline this quarter. The Energy Information Administration reported US crude stocks fell modestly last week.

Brent crude futures fell 3 cents to $52.13 a barrel, a 0.1 per cent loss, by 12:28 pm EST (1728 GMT). US West Texas Intermediate (WTI) crude futures rose 54 cents to $45.15 a barrel, a 1.2 per cent gain.

In Italy, 10-year yields are set for their biggest monthly drop since July 2015.

In the last auction of the year, investors were willing to buy 10-year government bonds at 2.70 per cent, down from 3.24 per cent last month.

The auction could be a sign Italy has turned a corner after months of consternation over fractious talks on its spending plans with the European Union.

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