Miners, tech lift global stocks; oil jumps on tightening supply

Dollar rebounds as euro falls before Jackson Hole meeting

NEW YORK, Aug 22, (Agencies): Global equity markets rose on Tuesday, lifted by mining companies in Europe and technology shares on Wall Street, while crude oil rebounded on indications supply is gradually tightening, especially in the United States.

US Treasury and gold prices fell ahead of an annual meeting this week of central bankers in Jackson Hole, Wyoming, where Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are due to speak.

A broadly resurgent US dollar prompted investors to square positions in a thin market before the central bank conference begins on Thursday.

With investors caught between a generally benign economic backdrop that prevents too much of a sell-off but lacks a catalyst for new highs, “we do seem to be settling into more of a range-bound market,” said Larry Hatheway, chief economist at asset manager GAM.

A gauge of global equity markets, MSCI’s all-country world stock index rose 0.52 percent, while its emerging markets index gained 0.82 percent.

Stocks on Wall Street rallied, lifted by 1-percent gains in information technology shares and materials.

The Dow Jones Industrial Average rose 125.05 points, or 0.58 percent, to 21,828.8. The S&P 500 gained 15.62 points, or 0.64 percent, to 2,443.99 and the Nasdaq Composite added 63.84 points, or 1.03 percent, to 6,276.96.

In London, the blue-chip FTSE 100 equity index rose 0.89 percent, lifted by a rally in base metals that pushed copper to a three-year high and nickel to its strongest in eight months on the London Metal Exchange.

Copper rose to $6,642.50 a tonne, the highest since November 2014, before paring gains to $6,592.50, while three-month nickel was bid up 1.4 percent at $11,475 a tonne.

The FTSEurofirst 300 index of leading European shares rose 0.85 percent.

Europe’s basic resources sector enjoyed a second session of gains and was the top-gaining sector, supported by a rally in iron ore prices.

Oil prices rose. Benchmark Brent crude was up 52 cents at $52.18 a barrel, while US light, sweet crude was 53 cents higher at $47.90 a barrel.

The dollar rallied after falling for two straight days, benefiting from the euro’s decline following weakerthan-expected euro zone data as well as investors adjusting positions ahead of the central bankers’ conference in Jackson Hole.

The dollar index rose 0.36 percent against a trade-weighted basket of its currencies to 93.431.

The euro, meanwhile, slid 0.41 percent against the greenback to $1.1766, retracing most of its overnight gains when it posted its biggest single day rise so far this month.

Spot gold was down 0.25 percent at $1,287.66 an ounce.

US stocks were higher in early afternoon trading on Tuesday, with all the three major indexes poised for their best one-day percentage gains in more than a week, led by technology stocks.

Nine of the 11 major S&P sectors were higher, with the heavyweight tech index up 1.27 percent, rising for the first time in four days.

The materials index also jumped more than 1 percent, poised for its best day in four weeks, boosted by rising commodity and metals prices.

Metals prices, including of copper, zinc and nickel, were higher, despite a slight pullback, against a backdrop of strong results for mining firms and talk of shortages in some metals.

The absence of major news from the White House and on the tensions between the United States and North Korea - two major factors that roiled the market in the past two weeks also helped calm nerves.

At 12:50 pm ET (1650 GMT), the Dow Jones Industrial Average was up 148.23 points, or 0.68 percent, at 21,851.98 and the S&P 500 was up 19.15 points, or 0.79 percent, at 2,447.52.

The Nasdaq Composite was up 70.75 points, or 1.14 percent, at 6,283.87.

So far, 257 stocks have hit new 52week highs, while 244 have hit fresh 52-week lows across all US exchanges. If the ratio holds, it will mark the first time in ten sessions that more stocks have hit highs than lows.

Investors await the annual central bankers meeting in Jackson Hole, Wyoming, later this week. Federal Reserve Chair Janet Yellen’s speech on Friday will be closely watched for a steer on US monetary policy, but central bank observers do not expect her to give new guidance.

Among stocks, Freeport jumped 3.9 percent on news that Indonesia expects to strike an agreement this month to allow the miner to keep operating its copper mine in Papua.

Macy’s rose as much as 4.6 percent putting the stock on track for its best day in nearly 7 months, after announcing restructuring and job cuts.

Coty tumbled 17.7 percent, on course for its worst single-day percentage fall, after the beauty products maker posted a surprise quarterly loss.

DSW shares jumped 23.5 percent after the footwear retailer reported a surprise rise in comparable sales.

Advancing issues outnumbered decliners on the NYSE by 1,955 to 847. On the Nasdaq, 1,965 issues rose and 855 fell.

Europe

A flurry of results for heavyweight mining stocks and a plunge in Provident Financial shares injected some energy into European shares on Tuesday, with the region’s benchmark indexes ending a three-day losing streak.

The pan-European STOXX 600 rose 0.8 percent, having fallen close to a five-month low in the previous session, while euro zone blue chips gained 0.9 percent, also supported by a weaker euro.

Italian blue chips fell 0.1 percent, lagging the broader market as fresh political worries put pressure on the country’s government bonds.

Europe’s basic resources sector enjoyed a second session of gains and was the top-gaining sector, up 1.7 percent, supported by a rally in iron ore prices.

Well-received results from miners BHP Billiton and Antofagasta also boosted the sector, rising 2.1 percent and 2 percent respectively.

UK subprime lender Provident Financial shed 66 percent after it issued its second profit warning in two months, canceled its dividend and said that its chief executive was leaving.

Shares in Provident Financial were already down around 40 percent for the year ahead of the profit warning, which took year to date losses to nearly 80 percent.

On the positive side, UK housebuilder Persimmon rose 1.8 percent after it posted a 30 percent rise in firsthalf profit.

A rally in Fiat Chrysler stalled after Chinese automaker Great Wall Motor affirmed its interest in the ItalianAmerican automaker but said it had not held talks. Fiat shares touched a 19-year high before ending up 0.3 percent.

The European corporate earnings season is drawing to a close, with 87 percent of MSCI Europe firms having given updates for the second quarter.

Of these firms, more than 60 percent have either met or beaten analysts’ expectations, according to Thomson Reuters data, with earnings growth for the quarter clocking in at around 24 percent compared with the same period last year.

Most Asian markets rose on Tuesday ahead of a closely watched meeting of central bankers later in the week, although concerns linger about Donald Trump’s economic agenda and about geopolitical crises.

Equities have been struggling in recent weeks due to the continuing standoff between the US and North Korea, which has been compounded by Thursday’s terror attack in Barcelona.

However, investors mostly moved back into buying mode Tuesday, sending Hong Kong 0.9 percent higher. Sydney closed up 0.4 percent, Singapore rose 0.6 percent and Seoul ended up 0.4 percent. Shanghai added 0.1 percent.

There were also gains in Taipei but Tokyo ended 0.1 percent off.

Key figures around 0820 GMT Tokyo - Nikkei 225: DOWN 0.1 percent at 19,383.84 (close)

Hong Kong - Hang Seng: UP 0.9 percent at 27,401.67 (close)

Shanghai - Composite: UP 0.1 percent at 3,290.23 (close)

Dollar/yen: UP at 109.31 yen from 109.00 yen

Oil

Oil prices rose on Tuesday, lifted by indications that supply is gradually tightening, especially in the United States.

Benchmark Brent crude was up 30 cents at $51.96 a barrel by 1345 GMT. US light, sweet crude was also 30 cents higher at $47.67.

US commercial crude inventories have fallen by almost 13 percent from their March peaks, to 466.5 million barrels.

The Organization of the Petroleum Exporting Countries and non-OPEC producers including Russia have pledged to hold back about 1.8 million barrels per day (bpd) of output between January this year and March 2018 in order to tighten supplies and prop up prices.

Oil prices found extra support from news that Libya’s Sharara oilfield, the country’s largest, shut on Tuesday just hours after reopening following a three-day pipeline blockade.

Gold

Gold prices fell on Tuesday, under pressure from a stronger dollar ahead of an annual meeting of central bankers this week, while speculative buying pushed palladium to its highest since February 2001.

Spot gold was down 0.2 percent at $1,288.39 an ounce at 1342 GMT. That compares with last week’s peak at $1,300.8 — its highest since early November. US gold futures slid 0.5 percent to $1,290.60 an ounce.

Investors are waiting for speeches by European Central Bank President Mario Draghi and Federal Reserve Chair Janet Yellen at Jackson Hole, Wyoming, for clues to the direction of interest and currency rates.

A rising US currency makes dollar-denominated commodities more expensive for holders of other currencies, which could subdue demand.