Commodity Rally Gives Stocks a Boost
19 April 2018 - 10:02AM
Dow Jones News
By Joanne Chiu and Riva Gold
-- European stocks flat
-- Hang Seng climbs
-- Crude oil rally continues
Stocks in Europe and Asia mostly inched higher Thursday as a
rally in commodity prices boosted shares of energy and materials
companies.
The Stoxx Europe 600 edged up 0.1% in the early minutes of
trading, following modest gains in Japan, Hong Kong and Australian
benchmarks.
Oil and mining companies led gains, with Brent crude oil last up
0.5% at $74.87 a barrel after settling Wednesday at its highest
since November 2014. Government data showed U.S. stockpiles fell by
more than analysts were expecting, the latest sign a global glut in
crude is abating.
Copper futures were last up 0.3% at $7,053 a metric ton, while
LME nickel futures were up 6.4% at $16,285 a metric ton and
aluminum futures rose 2.8% to $2,622.50 a ton. That helped Europe's
basic resources sector inch up 0.6% on Thursday.
Some investors also expect strong first-quarter results to
continue to help lift stocks after a rocky start to the second
quarter, marked by worries about trade and U.S.-led strikes in
Syria.
"With the recent jitteriness of markets ... the earnings season
should remind people that companies are still growing," said
Caroline Simmons, deputy head of the U.K. investment office at UBS
Wealth Management. "We're still quite positive on markets," she
said.
In Europe on Thursday, shares of Publicis Groupe rose 4.4% after
the advertising agency reported solid growth from its North
American business, while Swiss conglomerate ABB rose 4.3% after
reporting a drop in net profit but slightly higher revenue.
A post-earnings decline in shares of Novartis and Unilever
weighed on the broader index, however, keeping gains in check.
Earlier, Asia-Pacific stocks mostly rose Wednesday, supported by
gains in energy companies and Chinese markets.
Hong Kong's China Enterprises Index, made up of Chinese-based
firms with listings in Hong Kong, climbed 1.5%, while the benchmark
Hang Seng Index rose 1%. Oil-related stocks helped fuel gains, as
PetroChina jumped 5.3% and peer Cnooc gained 3.5%.
Australian energy stocks rose a further 0.7%, putting the
month's advance at 8.2%, on pace for the biggest monthly gain since
2011.
The Shanghai Composite Index rose 0.8% while Japan's Nikkei
Stock Average edged up 0.2%.
Signs of easing geopolitical tensions have also helped smooth
markets recently.
"The trade risk between the U.S. and China can be reduced
because ultimately China can use North Korea as a bargaining chip,"
said James Cheo, senior investment strategist at Bank of
Singapore.
But Vincent Wen, an investment manager at KCG Securities Asia,
noted that fears about trade tensions and other geopolitical risks
could re-emerge at any time. The weak March trade data from China
should also keep investors alert, he added.
Write to Joanne Chiu at joanne.chiu@wsj.com and Riva Gold at
riva.gold@wsj.com
(END) Dow Jones Newswires
April 19, 2018 03:47 ET (07:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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