Commodity Rally Gives Stocks a Boost
19 April 2018 - 9:18PM
Dow Jones News
By Joanne Chiu and Riva Gold
-- S&P 500 futures little moved
-- Hang Seng climbs
-- Crude oil rally continues
Stocks in Europe and Asia mostly inched higher Thursday as a
rally in commodity prices continued to boost shares of oil-and-gas
companies.
The Stoxx Europe 600 was up 0.1% midday and the FTSE 100 edged
up 0.2% near its highest since February, following modest gains in
Japan, Hong Kong and Australia.
Futures pointed to a 0.2% opening dip for the S&P 500,
however, with the index set to cool slightly after three straight
days of advances.
Oil-and-gas companies were among the best performing stocks
globally on Thursday, with Brent crude oil last up 0.6% at $74.09 a
barrel after settling Wednesday at its highest since November 2014
when U.S. stockpiles fell by more than analysts were expecting.
"It's allowing commodity companies to make money and business
investment to pick up," said Guy Miller, chief market strategist at
Zurich Insurance Group.
Some analysts also noted, however, that higher commodity prices
typically push up raw materials costs for other companies, can put
pressure on consumers and ultimately exert upward pressure on
inflation.
"Consumers are more sensitive to rises in the price of gas than
they are to declines in price of gas, so we have to watch that to
see if that weighs on broader consumer confidence out there and if
that has any impact on growth," said William Delwiche, investment
strategist at Baird.
Yields on 10-year Treasurys rose to 2.890% from 2.867% late
Wednesday, their highest in nearly a month. Yields move inversely
to prices.
Investors continued to parse a slate of corporate results, after
a solid start to the earnings season eased worries about trade
tensions, technology regulation and geopolitical uncertainties
earlier this week.
"With the recent jitteriness of markets...the earnings season
should remind people that companies are still growing," said
Caroline Simmons, deputy head of the U.K. investment office at UBS
Wealth Management.
In Europe on Thursday, shares in Publicis Groupe rose 7.6% after
the advertising agency reported solid revenue figures and
reaffirmed its 2018 targets, while Swiss conglomerate ABB rose 5.4%
after reporting a drop in net profit but slightly higher
revenue.
A post-earnings decline in shares of Novartis and Unilever
weighed down the broader Stoxx Europe 600 index, however, with the
companies' shares down 1.8% and 1.6% respectively, while index
heavyweight Nestlé rose just 0.5% after announcing results.
Unilever and Nestlé both struggled to raise prices in the first
quarter as some of the world's largest consumer goods companies
face increasingly fierce competition.
"Consumers are still very price conscious -- it's a reason we
don't think inflation will get out of hand," said Mr. Miller.
Earlier, Asia-Pacific stocks mostly rose Wednesday, supported by
gains in energy companies and Chinese markets.
Hong Kong's China Enterprises Index, made up of Chinese-based
firms with listings in Hong Kong, climbed 2.1%, while the benchmark
Hang Seng Index rose 1.4%. Oil-related stocks helped fuel gains, as
PetroChina jumped 5.7% and peer Cnooc gained 4.4%.
Australia's S&P ASX 200 edged up 0.3%, the Shanghai
Composite Index rose 0.8% and Japan's Nikkei Stock Average edged up
0.2%.
--Nathan Allen contributed to this article.
Write to Joanne Chiu at joanne.chiu@wsj.com and Riva Gold at
riva.gold@wsj.com
(END) Dow Jones Newswires
April 19, 2018 07:03 ET (11:03 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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