Equities near four-week highs, supported by upbeat earnings

Oil breaks above $72; dollar steady

NEW YORK, April 18, (Agencies): World equity markets climbed to approach a four-week high on Wednesday, as investors’ appetite for the riskier asset was boosted by upbeat earnings from companies in Europe and the United States.

The US dollar clung to gains amid fading concerns over a global trade war, while a reported decline in US crude inventories and the possibility of supply disruptions pushed oil prices higher.

MSCI’s gauge of stocks across the globe was up 0.56 percent, the highest since March 21, and on track for a third straight session of gains.

The index was supported by a higher open on Wall Street on Wednesday, following the latest batch of earnings. Morgan Stanley shares rose 3 percent after the bank reported a 40 percent jump in quarterly profit, driven by its trading business.

The Dow Jones Industrial Average rose 12.93 points, or 0.05 percent, to 24,799.56, the S&P 500 gained 9.17 points, or 0.34 percent, to 2,715.56 and the Nasdaq Composite added 25.05 points, or 0.34 percent, to 7,306.15.

European shares firmed amid strong company results, including those from French food group Danone, private healthcare provider Mediclinic and Dutch oil and chemical storage company Vopak.

Europe’s broad FTSEurofirst 300 index was up 0.32 percent at 1,496.62.

The US dollar held steady versus a basket of major currencies as solid company results and fading concerns about a trade war helped keep a lid on safe-haven demand for the greenback.

The dollar found support from relatively stronger economic data than those seen in Europe and other developed markets. The dollar index, which measures the greenback against a basket of six major currencies, was 0.07 percent higher at 89.58.

Trading across US government bond maturities was range-bound on Wednesday, with yields little changed in spite of gains in the equity market.

Oil extended gains, rising more than $1 on a reported decline in US crude inventories and after sources signalled top exporter Saudi Arabia wants to see the crude price closer to $100 a barrel.

Brent crude oil futures were 1.9 percent higher at $72.95 a barrel, while US WTI crude futures were up 2.2 percent at $68.06.

Gold prices rose to a one-week high on technical trading and as the dollar held steady. Spot gold was up 0.3 percent at $1,351.01 an ounce.

US

Wall Street edged higher in a volatile session on Wednesday as industrial stocks gained on strong results from some marquee companies and a jump in oil prices boosted energy stocks.

The gains were kept in check by technology stocks, which were hit by a 7.6 percent slump in IBM after the company’s margins missed estimates as well as declines in semiconductor stocks.

No. 3 US railroad operator CSX Corp jumped 6.3 percent after topping profit estimates. The news lifted shares other railroads and powered a 1.9 percent jump in the Dow Jones Transport index. United Airlines gained 6.5 percent and lifted other airline stocks after reporting a better-than-expected quarterly profit, helped by higher fares.

“Even though it’s early in the earnings season, what you’re seeing is what folks were hoping — it is in line with expectations,” said Thomas Martin, senior portfolio manager at GlobAlt Investments in Atlanta.

Earnings at the S&P 500 companies are estimated to grow 18.6 percent in the first quarter, the biggest increase in seven years, according to Thomson Reuters data.

At 12:29 pm ET, the Dow Jones Industrial Average was unchanged at 24,787.15 and the S&P 500 rose 0.30 percent to 2,714.53.

The Nasdaq Composite gained 0.43 percent to 7,312.41, lifted by consumer discretionary stocks including Amazon and Tesla.

Tesla rose 2.4 percent after a report that the company was aiming to ramp up production of Model 3 cars to reach its goal.

The CBOE Volatility index was up 0.51 points at 15.76, marking its first rise after closing lower for six days in a row.

Oil prices jumped about 2 percent, on a decline in US crude inventories and after sources signaled top exporter Saudi Arabia wants to see crude prices closer to $100 a barrel. The S&P energy sector was up 1.6 percent and led the gainers among the 11 major S&P indexes.

Lam Research fell 4.6 percent after the chip equipment maker kept its full-year shipment forecast unchanged, which analysts said could imply a slowdown in demand.

Other chip stocks including Applied Materials and MKS Instruments also fell, and the broader Philadelphia SE Semiconductor index was down 0.5 percent.

Advancing issues outnumbered decliners on the NYSE for a 1.79-to-1 ratio, and on the Nasdaq, for a 1.77to-1 ratio.

Europe

European shares rose to fresh sevenweek highs on Wednesday, helped by well-received company results and a rally in mining stocks on the back of soaring metal prices.

The pan-European STOXX 600 benchmark index gained 0.3 percent, with a rise among more cyclical sectors contributing the most to gains. The FTSE rose 1.3 percent.

The basic materials index, which tracks big miners like Glencore, rose 4.4 percent, its biggest one-day gain since the US presidential election in November 2016. In the sector, Russian precious metals miner Polymetal, whose shares have been hit by concerns over US sanctions, rose 12 percent after saying its first-quarter revenue climbed 19 percent year-on-year.

Glencore rose 7.7 percent, Aurubis added 6.6 percent, while Rio Tinto advanced 5.4 percent.

Company updates were broadly rewarded with a bounce in shares, as French food group Danone rose 1.5 percent after its first-quarter sales beat forecasts on the back of strong demand for baby food in China.

Private healthcare provider Mediclinic rose 9.2 percent after a full-year update, while Dutch oil and chemical storage company Vopak gained 6.9 percent after saying it had the potential to improve earnings significantly in 2019.

While the European first-quarter earnings season is not expected to be quite as stellar as in the United States, year-on-year earnings growth for the MSCI EMU (European Economic and Monetary Union) is expected to be around 16 percent in dollar terms, according to Thomson Reuters I/B/E/S data.

Still in earnings, however, German auto supplier Continental AG lowered its full year outlook after exchange rate and inventory valuation effects resulted in a 150 million euros hit in the first half of 2018. Its shares fell 4 percent.

Elsewhere, British property company Hammerson withdrew its recommendation that shareholders back a merger with smaller rival Intu Properties.

“Retail businesses are already struggling with higher business rates as well as declining footfall so today’s news that Hammerson is pulling out of its ... bid for its rival Intu Properties is quite a sensible move,” Michael Hewson, chief market analyst at CMC Markets UK, said in a note.

Shares in Hammerson rose 4.1 percent, while Intu Properties fell 4 percent, placing it among the worstperforming stocks on the STOXX 600.

Last week, France’s Klepierre walked away from a bid for Hammerson, saying the British firm failed to provide “meaningful engagement” over a potential deal.

Italy’s FTSE MIB index added 0.5 percent after Italian President Sergio Mattarella asked Senate speaker Maria Casellati to meet with bickering political parties to see if a government could be formed following inconclusive elections six weeks ago.

Asia

Asian markets climbed Wednesday following a rally on Wall Street as easing trade and Syria concerns allowed investors to concentrate on earnings and upbeat data, while fresh news on US-North Korea talks also provided support.

Hong Kong rose 0.7 percent, Shanghai ended up 0.8 percent, Sydney advanced 0.3 percent and Tokyo was 1.4 percent higher.

Singapore gained 1.7 percent, while Wellington, Taipei, Manila and Jakarta all climbed.

Seoul surged more than one percent as it emerged the US and North Korea had held “talks at the highest levels” as part of efforts to line up a summit between Donald Trump and Kim Jong Un in the coming weeks.

Key figures around 0810 GMTTokyo — Nikkei 225: UP 1.4 percent at 22,158.20 (close)

Hong Kong — Hang Seng: UP 0.7 percent at 30,284.25 (close)

Shanghai — Composite: UP 0.8 percent at 3,091.40 (close)

Dollar/yen: UP at 107.30 yen from 107.03.

Oil

Oil extended gains on Wednesday, rising more than $1 on a reported decline in US crude inventories and after sources signalled top exporter Saudi Arabia wants to see the crude price closer to $100 a barrel.

Top oil exporter Saudi Arabia would be happy for crude to rise to $80 or even $100, three industry sources said, a sign Riyadh will seek no changes to a supply-cutting deal even though the agreement’s original target is within sight.

Brent crude futures were up $1.17 at $72.75 by 1418 GMT, while US WTI crude futures gained $1.30 to $67.82, having hit their highest since late 2014 at $68.08.

US crude inventories fell by 1 million barrels last week to 428 million barrels, the American Petroleum Institute (API) said.

Gold

Gold prices rose to a one-week high on Wednesday on technical trading and as the dollar held near three-week lows even as risk appetite lifted stocks.

Spot gold was up 0.3 percent at $1,351.08 per ounce by 1356 GMT, after touching its highest since April 11, while US gold futures for June delivery were 0.5 percent higher at $1,356.

Gold broke above $1,350, a significant resistance level for gold, said Activtrades chief analyst Carlo Alberto De Casa, and a close above this level would confirm positive momentum for gold.

“If gold can remain above the $1,350 level for a couple of days there is a good chance to see it jumping up to $1,400,” he said.

Kitco Metals senior analysts Jim Wyckoff said the chart positions for gold and silver are “tilted in favour of the bulls, which is inspiring technically-based buying interest at mid-week”.