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GLOBAL MARKETS-Oil gains, energy shares buoy global stocks; yen slides

Published 30/09/2016, 02:40 am
© Reuters.  GLOBAL MARKETS-Oil gains, energy shares buoy global stocks; yen slides
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* Oil company shares add to gains after OPEC deal

* Wall St ticks lower, but energy shares up

* Crude rises after earlier slip (Updates with U.S. markets, changes dateline from previous LONDON)

By Rodrigo Campos

NEW YORK, Sept 29 (Reuters) - Energy shares buoyed global stocks on Thursday as crude prices added to the previous session's gains on optimism over a plan among OPEC members to curb output.

The expected agreement lifted the currencies of crude-producing countries like Norway and Canada overnight while the safe-haven Japanese yen dropped almost 1 percent versus the U.S. dollar on Thursday, weighed further by strong U.S. economic data.

Crude prices wobbled initially after Wednesday's near 6 percent surge as investors questioned whether OPEC's first deal to limit output since 2008 would balance the oversupplied oil market.

Stocks on Wall Street traded lower, with utilities, often sold when Treasury yields rise, as the worst performer. Healthcare and tech stocks were the largest weights.

"The markets are taking a step back after a couple of pretty good days," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

The Dow Jones industrial average .DJI fell 37.39 points, or 0.2 percent, to 18,301.85, the S&P 500 .SPX lost 4.47 points, or 0.21 percent, to 2,166.9 and the Nasdaq Composite .IXIC dropped 22.87 points, or 0.43 percent, to 5,295.68.

The energy index of the S&P 500 rose 0.5 percent.

The European oil and gas index .SXEP soared 4.4 percent in its best day in three months, but the pan-European STOXX 600 index .STOXX closed flat.

The pan-European FTSEurofirst 300 index .FTEU3 ended up 0.1 percent, while MSCI's gauge of stocks across the globe .MIWD00000PUS rose 0.2 percent.

In Russia, a major oil producer, the dollar-denominated RTS share index .IRTS rose 2.3 percent.

Oil companies, along with the weaker yen, also lifted Tokyo shares, which closed 1.4 percent higher .N225 . Nikkei futures NKc1 rose 0.6 percent.

The Organization of the Petroleum Exporting Countries agreed to cut output to a range of 32.5 million-33.0 million barrels per day from the group's current estimated output of 33.24 million bpd, ministers at the talks in Algiers said. crude CLc1 was up 1.9 percent at $47.95 a barrel and Brent LCOc1 last traded at $49.40, up 1.5 percent on the day.

While the deal helped lift currencies of oil exporters on Wednesday, including the Norwegian crown and the Canadian dollar, those currencies were little changed on Thursday, partly on concerns over the feasibility of OPEC implementing the deal.

"There is reason to think that being skeptical about OPEC production quotas is a reasonable approach," said David Gilmore, partner at FX Analytics in Essex, Connecticut.

U.S. economic growth was less sluggish than previously thought in the second quarter as exports grew more than imports and businesses raised their investments, while other data showed America's trade deficit for goods shrank in August, boding well for third-quarter growth. Japanese yen JPY= , often sought when investor risk appetite is low, was last down 0.8 percent at 101.48 per dollar, having fallen as low as 101.84.

U.S. Treasury yields inched higher as traders sought riskier assets. Benchmark 10-year notes US10YT=RR fell 5/32 in price to yield 1.5823 percent, up from 1.567 percent on Wednesday.

However, U.S. yields remain trapped in tight ranges and could resume their recent downtrend given geopolitical tensions and political uncertainty, analysts said.

"I wouldn't get caught up in the short-term moves in the Treasury market," said Mike Materasso, co-chair of Franklin Templeton's fixed income policy committee in New York. "The oscillations of five to 10 basis points are not that significant because if you look at the 10-year chart over the last three months, we're still trading in a narrow range."

Spot gold prices XAU= fell $3.36 or 0.3 percent, to $1,317.87 an ounce.

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