Global markets climb along with dollar as investors eye tax vote

European stocks snap longest losing streak in a year

NEW YORK, Nov 16, (Agencies): Investors returned to stock markets around the world on Thursday, inspired by bargain hunting and strong corporate earnings reports, while anticipation of a vote on US tax policy limited the dollar’s gains.

After five consecutive daily losses on the MSCI index of world stocks bounced back helped by Wall Street’s gains, which were boosted by results from Cisco Systems and Wal-Mart Stores.

The dollar index rose 0.04 percent, with the euro down 0.18 percent to $1.177.

Investors across all asset classes were keeping an eye on Washington as lawmakers in the Republicancontrolled House of Representatives prepared to vote on a tax bill.

But hopes for a revised US tax program have met with resistance in the Senate as some Republican lawmakers have criticized its tax bill, which is different from the House version.

The Dow Jones Industrial Average rose 187.65 points, or 0.81 percent, to 23,458.93, the S&P 500 gained 19.24 points, or 0.75 percent, to 2,583.86 and the Nasdaq Composite added 80.04 points, or 1.19 percent, to 6,786.25.

Oil prices dipped for the fifth day in a row as rising US production and inventories threatened to undermine a recent rally inspired by OPEC’s curbs on output.

US crude rose 0.33 percent to $55.51 per barrel and Brent was last at $61.98, up 0.18 percent on the day.

The liveliest moves in Asia came in Japan, where the Nikkei turned around early losses to surge 1.5 percent as investors returned after a sixday losing streak.

MSCI’s broadest index of AsiaPacific shares outside Japan closed 0.89 percent higher, while Japan’s Nikkei rose 1.47 percent.

The S&P 500 index recovered from its worst two-day fall since August on Thursday after Wal-Mart and Cisco shares soared on strong results.

Wal-Mart surged 8.74 percent to hit a record high of $97.90 after reporting quarterly sales that beat expectations on hurricane-related purchases and soaring online sales.

Cisco shares surged 6.44 percent as strength in security business helped its earnings. Both the stocks boosted the S&P and the Dow.

“The bull market is still intact. Good earnings and strong economic data are what stocks care about,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

At 10:45 am ET (1445 GMT), the Dow Jones Industrial Average was up 178.42 points, or 0.77 percent, at 23,449.7, the S&P 500 was up 19.58 points, or 0.76 percent, at 2,584.2 and the Nasdaq Composite was up 78.54 points, or 1.17 percent, at 6,784.75.

The CBOE Volatility index, Wall Street’s fear gauge, posted its first decline in six days.

Nine of the 11 major S&P indexes were higher, led by gains in consumer staples and technology stocks.

Folgers coffee maker J M Smucker rose about 8.04 percent as its sales and profit topped analysts’ forecasts.

Utilities and energy sectors were the only laggards.

Viacom shares sank 5.6 percent after the MTV owner said it expected high single-digit declines in revenue from US cable TV operators and online distributors in the first half of 2018.

Best Buy fell 6.88 percent as quarterly same-store sales came in below estimates, hurt by a late launch of iPhone X.

Advancing issues outnumbered decliners on the NYSE by 2,235 to 537. On the Nasdaq, 2,214 issues rose and 513 fell.

European shares enjoyed a recovery on Thursday, snapping their longest losing streak since October 2016 as the cyclical sectors which had driven a market-wide sell-off made a comeback, though oil was a weak spot.

The pan-European STOXX 600 index climbed 0.8 percent, with the cyclicals-heavy DAX up 0.6 percent.

Financial services, autos and technology sectors were among the bestperforming, driving the market higher.

“European equities suffered recently from the stronger euro and some early profit-taking before the end of the year,” said Valentin Bissat, European equity strategist at Mirabaud Asset Management.

“After the recent underperformance, we should see cyclicals outperform again in the next few weeks with long-term interest rates rising and a steeper yield curve,” he added.

Shares in energy firms lagged, however, with Europe’s oil and gas index hitting a one-month low after Reuters reported that Norway’s trillion-dollar sovereign wealth fund had proposed to drop oil and gas companies from its benchmark index.

Elsewhere investors continued to digest a raft of earnings updates, with most of the top movers reacting to results.

French telecoms firm Bouygues rose 5.2 percent after raising its profitability goal for the year, buoyed by a robust 37 percent jump in ninemonth operating profits.

Troubled British engineer GKN was the biggest faller, down 4.8 percent after it announced a further write-off.

Broker action was also a driver. Biotech firm Genmab rose 6.8 percent after Bernstein rated it an “outperform”, while Wirecard shares gained 4.5 percent after Berenberg recommended buying into the payments sector.

Italian banks Banco BPM and BPER Banca were among the top fallers after Banca Carige failed to clinch a cash call, reigniting fears around bad loans in the sector.

European equity strategists at Bernstein said recent risk aversion created a buying opportunity as a “robust” earnings outlook continued to provide fundamental support for the market.

Overall the MSCI EMU index of euro zone companies is tracking earnings growth of 10.7 percent in dollar terms for the third quarter, with basic materials, financials and technology the main drivers of earnings beats. The broader MSCI Europe index is delivering 10 percent earnings growth.

Most Asian markets edged up on Thursday after a recent sell-off across global markets but gains were tempered as the optimism that pushed equities to multi-year highs last week gives way to investor caution.

Tokyo, which had fallen for six straight days after hitting a 25-year high on Tuesday, jumped 1.5 percent, while Hong Kong added 0.6 percent.

Sydney was 0.2 percent up, Seoul added 0.7 percent and Wellington and Jakarta were well up.

However, Shanghai lost 0.1 percent and Singapore shed 0.5 percent.

With oil prices creeping up slightly energy firms in Asia were mixed following this week’s big losses in the commodity.

Hong Kong-listed CNOOC was up 0.7 percent but PetroChina shed 0.4 percent, while Inpex in Tokyo lost almost two percent and Sydneylisted Rio Tinto ticked up. Key figures around 0720 GMT Tokyo — Nikkei 225: Up 1.5 percent at 22,351.12 (close)

Hong Kong — Hang Seng: Up 0.6 percent at 29,018.76 (close)

Shanghai — Composite: Down 0.1 percent at 3,399.25 (close)

Dollar/yen: Up at 113.09 yen from 112.85 yen

Oil prices dipped on Thursday as rising US production and inventories threatened to undermine a rally inspired in recent months by OPEC’s curbs on output, despite expectations that these will be extended at the group’s meeting on Nov 30.

Brent crude futures were down 46 cents a barrel at $61.41 by 1451 GMT. US light crude fell 36 cents to $54.97.

Oil prices have slipped in recent days from the two-year highs hit last week by both crude benchmarks after signs that US supply is rising fast and could potentially undermine OPEC’s efforts to tighten the market.

“The oil market sell-off is easing, but the bearish afterglow from yesterday’s update on US oil stockpiles is keeping bears in the driving seat,” PVM wrote in a note to clients, referring to new data from the US Energy Information Administration on Wednesday.

“Selling pressures are being underpinned by an unexpected jump in US crude and gasoline inventories,” PVM added.

The EIA data showed domestic crude inventories rising for a second week in a row, building by 1.9 million barrels in the week to Nov 10 to 459 million barrels.

Analysts in a Reuters poll had expected a decrease of 2.2 million barrels.

US crude oil production has hit a record of 9.65 million bpd, meaning output has risen by almost 15 percent since its mid-2016 low.

But expectations that a meeting of the Organization of the Petroleum Exporting Countries in Vienna on Nov 30 would result in OPEC nations and other big exporters extending their pact to tighten supply has offset some of the pressure on prices.

Gold prices were steady on Thursday as investors weighed the impact of an expected rise in US interest rates against uncertainty over the direction of US fiscal policy.

Gold is highly exposed to interest rates and returns on other assets because rising rates lift the opportunity cost of holding non-yielding bullion.

Spot gold was flat at $1,2758 an ounce at 1436 GMT, having touched a 3-1/2 week high of $1,289.09 on Wednesday.

US gold futures added 0.1 percent to $1,279.40.

Gold has traded in a tight range spanning about $24 in November.

ICBC Standard Bank precious metals strategist Tom Kendall said gold was stuck in a range, with the prospect of a rise in US interest rates exerting pressure while uncertainty about the direction of US fiscal policy offered support.