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GLOBAL MARKETS-Stocks gain on quick economic revival hopes, oil slides

Published 09/06/2020, 02:35 am
Updated 09/06/2020, 02:36 am
© Reuters.
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(Adds U.S. market, byline, dateline; previous LONDON)

* European stocks slightly lower on poor China, German data

* Oil prices slip

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Herbert Lash

NEW YORK, June 8 (Reuters) - A gauge of global equity markets rose on Monday on hopes of a fast recovery from the coronavirus economic slump while oil slid after Saudi Arabia said an extension of output cuts by producer nations would not include extra cuts by three Gulf countries.

A surprisingly upbeat U.S. jobs report on Friday along with progress toward a European recovery fund, more German fiscal spending and the European Central Bank's decision last week to expand its emergency stimulus program drove recovery hopes.

The U.S. dollar edged higher and commodity currencies gained as risk appetite ramped up. The New Zealand dollar rose to its highest in nearly four months after the government said it had stopped transmission of the coronavirus within the country.

Financial, automotive and retail-oriented and energy shares - the stocks most beaten-down since the pandemic slammed markets - led equity indices higher.

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.41%, but the pan-European STOXX 600 index .STOXX lost 0.32% after posting its strongest weekly gain in more than eight years on Friday. Jefferies said in a note that the German market .GDAXI , which fell 0.22%, "has become a tad overbought."

On Wall Street, the equity rally put the benchmark S&P 500 less than 1% away from recouping all of this year's losses.

The Dow Jones Industrial Average .DJI rose 230.87 points, or 0.85%, to 27,341.85. The S&P 500 .SPX gained 12.69 points, or 0.40%, to 3,206.62 and the Nasdaq Composite .IXIC added 21.54 points, or 0.22%, to 9,835.62.

Yields on top-rated German government bonds dipped but remained near more than two-month highs hit last week on the back of improving sentiment in world markets.

U.S. Treasury yields also fell, with the 10-year note US10YT=RR down 3.1 bases points at 0.8735%.

Gold rose after a steep decline, boosted by hopes of a dovish monetary policy outlook from the Federal Reserve after the U.S. central bank ends a two-day meeting on Wednesday.

Spot gold XAU= added 0.5%.

Oil fell after the Organization of Petroleum Exporting Countries and others agreed on Saturday to sustain cuts agreed to in April that were equal to about 10% of global oil supply. Saudi energy minister Prince Abdulaziz bin Salman told a news conference on Monday that the kingdom and Gulf allies Kuwait and the United Arab Emirates would not cut an extra 1.18 million bpd in July as they are doing this month. crude CLc1 fell 3.24% to $38.27 per barrel and Brent LCOc1 was at $41.07, down 2.91% on the day.

Asia shares rose overnight in a catch-up rally following Friday's U.S. jobs data but gains were capped by Chinese data, published on Sunday, which showed exports contracted in May. industrial output meanwhile slumped a record 17.9% in April and firms now expect a bumpy road ahead despite a massive stimulus package. stocks are probably under pressure following weak China data overnight. However, we do not think this marks the end of the rally," said Marija Vertimane, senior strategist at State Street (NYSE:STT) Global Markets.

The Japanese yen strengthened 1.09% versus the greenback at 108.42 per dollar, while the euro EUR= was up 0.11% to $1.1296.

The dollar index =USD fell 0.034%.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World stock valuations

https://tmsnrt.rs/2XIH51C Fed Balance Sheet versus VIX

https://tmsnrt.rs/37aQ9iZ US yield curve steepens

https://tmsnrt.rs/2ASzEfi

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