BCN-44,45 European stocks, euro extend recovery

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WORLD-MARKETS (UPDATE)

European stocks, euro extend recovery

LONDON, May 31, 2018 (BSS/AFP) – Most European stock markets and the euro
rose on Thursday, extending a slight recovery after a rout at the start of
the week caused by Italy’s political upheaval.

Around 1000 GMT, London’s benchmark FTSE 100 index was up 0.2 percent
compared with the close on Wednesday.

In the eurozone, Frankfurt’s DAX 30 fell 0.4 percent and the Paris CAC 40
climbed 0.2 percent.

Milan’s FTSE MIB rose 0.8 percent.

The euro climbed above $1.17, as inflation in the eurozone leaped to the
ECB’s target in May, fuelled by a huge increase in oil prices as the US
decided to pull out of a nuclear deal with Iran.

Asian equities earlier Thursday bounced back from the previous day’s
mauling as fears of turmoil in Italy were soothed by conciliatory noises from
the country’s two biggest populist parties.

“Fears over an Italian snap election have receded,” noted Joshua Mahony,
market analyst at IG traders.

The news provided relief to global markets beginning Wednesday after they
were sent spinning by the crisis in Italy — the eurozone’s third biggest
economy — which many feared could lead to fresh elections that could
essentially become a referendum on euro membership.

The gains continued into Asia on Thursday, with Tokyo ending 0.8 percent
higher, while Sydney added 0.5 percent, Singapore climbed 0.3 percent and
Seoul put on 0.6 percent.

Hong Kong added 1.4 percent and Shanghai finished up 1.8 percent, supported
by data indicating a bigger-than-expected rise in Chinese factory activity in
April. Wellington, Kuala Lumpur and Taipei were also comfortably higher.

– Volatility warning –

Oil prices were down but holding up after they also rallied Wednesday in
response to a report that said OPEC would likely lift output gradually,
soothing concerns about a new supply glut.

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WORLD-MARKETS (UPDATE) 2 LAST

Crude markets have been hammered since OPEC kingpin Saudi Arabia and Russia
last week indicated they could lift a cap on production, which has supported
prices for two years, as an oversupply crisis eases.

Investors are now looking forward to the release Friday of key US jobs
figures, which could provide some idea about the Federal Reserve’s plans for
raising interest rates.

Payrolls firm ADP estimated US private sector job growth at 178,000 in May,
down from 204,000 in April and slightly below analysts’ expectations.

However, while sentiment is positive, analysts warned that ongoing
geopolitical issues and the unresolved China-US trade row continue to dog
trading floors.

“We are going to be filled with tremendous uncertainty over the course of
the summer,” David Ader, chief macro strategist at Informa Financial
Intelligence, told Bloomberg Television.

“If you look at things like the various economic surprise indices out there
they have been slowing down, but on the other hand you still have a Fed hike
coming in June. I see a lot of uncertainty, which results in a lot of
volatility.”

– Key figures around 1000 GMT –

Milan – FTSE MIB: UP 0.8 percent at 21,971.04 points

London – FTSE 100: UP 0.2 percent at 7,703.73

Paris – CAC 40: UP 0.2 percent at 5,435.92

Frankfurt – DAX 30: DOWN 0.4 percent at 12,729.67

EURO STOXX 50: DOWN 0.1 percent at 3,439.47

Tokyo – Nikkei 225: UP 0.8 percent at 22,201.82 (close)

Hong Kong – Hang Seng: UP 1.4 percent at 30,468.56 (close)

Shanghai – Composite: UP 1.8 percent at 3,095.47 (close)

Milan – FTSE MIB: UP 0.5 percent at 21,900.01

New York – Dow Jones: UP 1.3 percent at 24,667.78 (close)

Euro/dollar: UP at $1.1704 from $1.1664 at 2100 GMT

Pound/dollar: UP at $1.3339 from $1.3281

Dollar/yen: DOWN at 108.84 yen from 108.91 yen

Oil – Brent Crude: DOWN 41 cents at $77.09 per barrel

Oil – West Texas Intermediate: DOWN 44 cents at $67.77

BSS/AFP/SR/1955 HRS