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GLOBAL MARKETS-Commodity rebound lifts world equities

Published 10/10/2015, 02:50 am
Updated 10/10/2015, 02:58 am
© Reuters.  GLOBAL MARKETS-Commodity rebound lifts world equities
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* World equity index on track for eighth rise in a row

* Commodity index poised for best week since 2012

* Fed minutes cool rate rise prospects; dollar at 3-week low

* Brent on track for best week since 2009

* Zinc soars on Glencore output cut (Updates with U.S. market opening levels, changes datelines, previous LONDON)

By Caroline Valetkevitch

NEW YORK, Oct 9 (Reuters) - Stocks on major world markets were on track for their biggest weekly gain since 2011 on Friday, helped by this week's strong rebound in metals and crude oil prices.

Brent crude oil was heading for its biggest weekly rise since March 2009, while the U.S. dollar hit a three-week low against the euro as minutes of the Federal Reserve's last policy meeting showed the U.S. central bank is in no rush to raise interest rates.

The MSCI world equity index .MIWD00000PUS was up 0.8 percent, on track for the eighth rise in a row and a roughly 4 percent gain for the week.

The 19-commodity Thomson Reuters/Core Commodity CRB Index .TRJCRB , a global benchmark for commodities, was up 4.2 percent on the week, on track for its biggest advance since 2012.

U.S. stocks were up slightly after trading down earlier, with concern about the outlook for earnings weighing on sentiment. Aluminum company Alcoa (NYSE:AA) AA.N shares were down 5.4 percent following disappointing results.

Zinc jumped, in its biggest daily gain in seven years, after troubled mining giant Glencore GLEN.L said it would cut production. ID:nL3N1285EM

Glencore shares gained and were on track for a gain of about 40 percent on the week - their biggest weekly rise since being floated in mid-2011 - and doubling from the record low reached only two weeks ago.

The dollar also fell against the Swiss franc, while a dollar index .DXY was down 0.5 percent. The euro was last up 0.59 percent against the dollar at $1.12430 EUR=EBS .

"The comments about inflation remaining low, the concern that that's going to push the hike out to next year is what's driving currencies against the board," said Jason Leinwand, managing director at Riverside Risk Advisors in New York.

The Fed minutes revealed the extent to which policymakers are concerned that a global economic slowdown might threaten the U.S. economic outlook. Though they said overseas turmoil had not "materially altered" economic prospects, they opted to hold interest rates steady last month. ID:nL1N128230

An unexpectedly weak U.S. jobs report for September last week led many investors to speculate that the Fed will not deliver its first hike until 2016, a feeling strengthened by the minutes.

The Dow Jones industrial average .DJI rose 35.95 points, or 0.21 percent, to 17,086.7, the S&P 500 .SPX gained 3.82 points, or 0.19 percent, to 2,017.25 and the Nasdaq Composite .IXIC added 24.99 points, or 0.52 percent, to 4,835.78.

The FTSEuroFirst index of the leading 300 European shares was up 0.5 percent .FTEU3 .

BRENT TRACK FOR WEEKLY GAIN

Brent crude oil futures LCOc1 were lower but on course for a rise of more than 10 percent on the week, which would be its biggest weekly gain since 2009.

U.S. crude was up 1.2 percent at $50.01 a barrel CLc1 . Oil also got a boost overnight after forecaster PIRA Energy Group predicted crude prices would rise to $70 per barrel by the end of 2016. ID:nL1N1281EF

Three-month zinc futures CMZN3 were up 11.2 percent on the London Metal Exchange at $1,854 a tonne after Glencore said it will cut production by 500,000 tonnes, equivalent to 4 percent of the world's output.

Zinc had fallen 30 percent since May to a five-year low, so the rebound could mark the bottom of the market and the commodities complex in general, some analysts said.

The 10-year U.S. Treasury prices US10YT=RR were flat, with the yield at 2.102 percent.

On Thursday HSBC issued one of the boldest U.S. and European yield forecasts of all the big investment banks, predicting the 10-year U.S. yield will fall to 1.5 percent and the equivalent German bund yield at just 0.2 percent next year. ID:nL8N1281EQ

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