Thursday 30th June 2016 |
Text too small? |
Global equites extended their rally amid bets central banks will help ease the impact of the UK’s decision to leave the European Union on the global economy and corporate profits.
"There are very reasonable expectations from central banks globally, especially from the US Federal Reserve, the [European Central Bank] and the [Bank of England], to provide more liquidity, guidance and clarity to support markets," Stephen Wood, chief market strategist for Russell Investments in New York, told Reuters.
The US dollar meanwhile fell amid bets the Fed won’t raise interest rates any time soon, and that it might actually cut them instead to ease the Brexit turmoil.
In Europe the Stoxx 600 Index ended the day with an increase of 3.1 percent from the previous close. Germany’s DAX index rose 1.8 percent, France’s CAC 40 index jumped 2.6 percent, while the UK’s FTSE 100 index surged 3.6 percent, boosted by rebounds in financial stocks.
“The counter-movement to the heavy losses after the Brexit shock show that perhaps some realism is starting to set back in, or perhaps that there is hope for an adequate solution,” Thorsten Engelmann, a trader at Equinet Bank in Frankfurt, told Bloomberg. “We still don’t know whether a new referendum would be an option for the UK, or whether there’s a way to go around it.”
Wall Street moved higher, too. In 2.43pm New York trading, the Dow Jones Industrial Average climbed 1.6 percent, while the Nasdaq Composite Index rallied 2 percent. In 2.28pm trading, the Standard & Poor’s 500 Index gained 1.6 percent.
Gains in shares of JPMorgan Chase and those of Merck, up 2.7 percent and 2.6 percent respectively recently, led the Dow higher. Shares of Home Depot slipped, last down 0.2 percent, for the only percentage decline in the Dow in afternoon trading.
Oil prices rose, also lifting energy shares, after the US government reported a larger-than-expected weekly decline in crude inventories.
Shares of Monsanto rose, trading 2.6 percent higher as of 1.41pm in New York. The world’s largest seed company said it is still in talks with Bayer and others about “alternative strategic options.” Last month Monsanto rejected Bayer’s US$62 billion takeover offer.
“While there is no formal update on the Bayer proposal, I have been personally in discussions with Bayer’s management over the last several weeks, along with others regarding alternative strategic options,” Hugh Grant, Monsanto’s chief executive officer, said in the statement.
Monsanto reported lower-than-expected profit and sales for the third quarter. It also said full-year earnings will be at the low end of its previously announced target range.
The results may lead to a “more conciliatory tone” in merger talks, with the next steps being a “modestly better proposal” from Bayer with detailed breakup and regulatory provisions, Jefferies analysts including Laurence Alexander said in a report, according to Bloomberg.
BusinessDesk.co.nz
No comments yet
Second St John withdrawal of labour takes effect tomorrow with further strikes likely
Sanford Appoints Independent Director
CRP ADVISES CLOSURE OF SHARE OFFER TO EXISTING INVESTOR
Devon Funds Morning Note - 14 August 2024
OCR 5.25% - Monetary restraint tempered as inflation converges on target
Consumers still need due diligence as new deposit takers emerge.
Woolworths strike: staff asked to dress up in Disney costumes for a week on their own dollar
Turners Invests in Quashed Online Insurance Platform
PGW Reports on Challenging Year
Arvida Announces Executive Team Changes