WASHINGTON: After booking a week of solid gains following a strong US jobs report, world equity markets on Friday soared to new highs after a session-long climb.
The dollar index, which had hit a one-year peak in the first session, retreated slightly in late trading as risk appetite improved and stocks edged higher.
The move came after US Labor Department jobs data came as a reassuring sign to investors who had been worried for months about how stocks would be trading after the Federal Reserve rolled back the 2020 COVID-19 pandemic-fueled stimulus. Will pay rent
Non-farm payrolls added 531,000 jobs last month as the rise in COVID-19 infections eased over the summer, offering more evidence that US economic activity was gaining momentum at the start of the fourth quarter.
Recent weeks have seen a series of records in global stocks, strengthened by blockbuster earnings reports from the biggest US listed companies.
The dollar index, which measures the greenback against a basket of six rivals, rose to a high of 94.634 after a jobs report, its highest level since September 25, 2020. The strength of the currency offers the Fed its highest level in more than a year. There is more evidence that economic recovery has gained momentum.
“If these numbers continue at this pace, we could probably see full employment at the end of the first quarter,” said Peter Cardillo, chief market economist at Spartan Securities.
Crude oil prices rose more than 2% on Friday after OPEC+ producers turned down US calls to ramp up production despite demand near pre-pandemic levels.
Brent crude was up $2.14, or 2.7%, at $82.68 a barrel. West Texas Intermediate crude (WTI) rose $2.47, or 3%, to $81.28.
“Markets are aware that the release of strategic reserves can only have a temporary bearish effect on immediate prices and is not a permanent solution to the imbalance between supply and demand,” said Rystad Energy’s head of oil markets Björner Tonhaugen in a note. said.
The Dow Jones Industrial Average rose 0.56%, while the S&P 500 gained 0.37%. The Nasdaq Composite rose 0.2%. The pan-European STOXX 600 index gained 0.05%.
The worldwide gauge of MSCI shares rose 0.17%.
Friday’s progress came even after the Federal Reserve announced Wednesday that it would begin easing its massive asset purchase program, though Fed Chairman Jerome Powell said he was in a hurry to increase borrowing costs. were not.
“Even though this happened as expected, it is an important milestone. The direction of the journey is now clearly toward policy normalization, although the Fed insists the tapering is not strict,” said LGT’s chief of staff in Asia Pacific. said investment strategist Stephen Hofer. “It was really expert communication and handled very well.”
US Treasury yields fell on Friday amid uncertainty and the curve flattened in choppy trading
The benchmark 10-year yield, which fell to its lowest level since September 24 at 1.436% and marked its biggest decline since July 19, was last 7.4 basis points lower at 1.4496%.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.29%, while Japan’s Nikkei fell 0.61%.
Hong Kong weighed on the regional index, as index heavyweight and rate-sensitive HSBC fell 1.25%, following a dovish call from the Bank of England (BOE) and concerns over asset stocks.
Trading in shares of Chinese developer Casa Group Holdings Ltd was suspended a day after the company said a subsidiary had missed payments on a money-management product, the latest of a deepening liquidity crisis in the Chinese property sector. signal.
An index tracking Hong Kong-listed mainland Chinese developers slipped 2.8%, and an onshore China property index fell 2%.
Broadly speaking, shares in Shanghai were down 1% and Chinese blue chips were down 0.5%.
While investors were happy with the Fed’s communication, some felt they were misdirected by policymakers at the BoE.
The Bank of England’s decision not to lift rock-bottom benchmark rates on Thursday proved the biggest blow to the markets and propelled sterling to 1.6% in its biggest one-day fall in more than 18 months.
Sterling fell as much as 0.5% on Friday, hitting a one-month low of $1.34250. Last time it was down 0.07%.
Germany’s 10-year bond yield is set for its biggest weekly decline since June last year, down 15 basis points as central banks kept policy rates unchanged.
Spot gold rose 1.4% to $1,816.73 an ounce.
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