World shares positive
World shares rose on Friday as stimulus measures by major central banks eased worries about growth, especially in Asian markets, while oil headed for its best week since January.
China cut a key lending rate for the second straight month on Friday, becoming the third major central bank to cut interest rates in recent days, after the European Central Bank and the U.S. Federal Reserve.
Equity markets have welcomed the central bank moves, although most of the cuts was already priced in and worries about a possible global slowdown still linger.
Renewed tensions in the Middle East, after an air attack knocked out a Saudi Arabian oil supply hub last weekend, have also unnerved investors. Oil prices were on track for a weekly gain of 7.6%, their biggest weekly rise since the first week of 2019. The MSCI world equity index, which tracks shares in 47 countries, gained 0.1%, on course for a fourth day of slim gains but still heading for a weekly loss. The index was bolstered by Europe’s STOXX 600, which climbed 0.1% as investors bought defensive stocks, and a 0.6% gain for Asian equities outside Japan. Wall Street futures gauges suggested gains of around 0.2%.
U.S. economic data had eased worries about slowdown in the world’s largest economy. The number of Americans claiming unemployment benefits rose less than expected and home resales increased to a 17-month high in August.
Some analysts were still cautious. Markets are waiting with bated breath for signs of where the economy is heading, said Michael Hewson, chief market analyst at CMC Markets.
Investors were also braced for volatility on “quadruple witching day” - the quarterly expiration of equity options and futures. A spike in U.S. overnight lending rates also sparked concerns of evaporating liquidity.
Sterling reached a two-month high of $1.2566 against the dollar after European Commission President Jean-Claude Juncker said he thought Brussels could reach a deal with Britain to leave the European Union. The pound was last up 0.3% at $1.2560.