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GLOBAL MARKETS-Stocks rise on tame U.S. inflation, dollar eases

Published 13/03/2019, 05:56 am
GLOBAL MARKETS-Stocks rise on tame U.S. inflation, dollar eases
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(Adds oil, gold settlement prices)

* Underlying U.S. inflation slows, supporting Fed on rates

* U.S. Treasury yields edge lower after inflation data

* Oil rises on cuts to Saudi, Venezuelan exports

* Boeing (NYSE:BA) shares slump as more countries ground 737 MAX plane

By Saqib Iqbal Ahmed and Herbert Lash

NEW YORK, March 12 (Reuters) - A gauge of world equity markets rose and the dollar eased on Tuesday after a tame reading on U.S. inflation reinforced expectations the Federal Reserve will not raise interest rates anytime soon, while Boeing shares slid for a second day.

U.S. consumer prices rose for the first time in four months in February but the modest pace of the increase resulted in he smallest annual gain in inflation in nearly 2-1/2 years. L1N20Y18N

In the 12 months through February, the CPI rose 1.5 percent, well under the Fed's target of 2 percent, leading the dollar to slip against the euro and the dollar index of leading U.S. trading partners to fall. Gold gained on the weaker greenback.

"The takeaway from the data was that inflation is in check and that would allow the Fed to remain patient and that is always good for equities," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance in Charlotte, North Carolina.

Boeing Co BA.N slumped 6.13 percent to extend Monday's losses as more countries, including all of the European Union, grounded the company's 737 MAX planes following a second fatal crash in five months. airplane manufacturer Airbus SE AIR.PA was the biggest contributor to advancing shares in the FTSEurofirst 300 .FTEU3 of leading European shares, rising 1.43 percent, but the index edged lower in choppy trade as investors awaited a Brexit vote.

British Prime Minister Theresa May headed for defeat on her plans to leave the EU as skeptical members of her Conservative Party appeared ready to defy her warning that Britain might not leave the bloc at all if they voted against her. GBP= fell 0.63 percent to $1.3068.

MSCI's all-country world index .MIWD00000PUS of equity performance in 47 countries rose 0.61 percent, while the pan-European STOXX 600 index .STOXX lost 0.06 percent.

On Wall Street, the S&P 500 .SPX gained 12.98 points, or 0.47 percent, to 2,796.28 and the Nasdaq Composite .IXIC added 47.61 points, or 0.63 percent, to 7,605.67.

The Dow Jones Industrial Average .DJI fell 46.51 points, or 0.18 percent, to 25,604.37, dragged lower by slumping Boeing.

The Mexican peso and Canadian dollar gained on the tame U.S. inflation data as the dollar index .DXY fell 0.3 percent and the Japanese yen JPY= weakened 0.04 percent versus the greenback at 111.29 per dollar.

The euro EUR= gained 0.44 percent to $1.1297.

U.S. Treasury yields drifted lower after the inflation data.

U.S. long-dated yields have fallen in six of the last seven sessions, while those on two-year notes, the security most sensitive to interest rate moves, dropped in five of the last seven. 10-year U.S. Treasury notes US10YT=RR rose 11/32 in price to push the yield down to 2.6015 percent.

Oil prices rose, supported by signs of tightening global supply after a Saudi official said the kingdom plans to cut oil exports in April, while a power outage in Venezuela reduced its crude exports.

Brent crude LCOc1 futures settled up 9 cents at $66.67 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 8 cents to settle at $56.87 a barrel.

U.S. gold futures GCv1 settled 0.5 percent higher at $1,297.70.

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