|27 December, 2018

Thursday outlook: Global markets rebound after steep drops

Asian shares gain in early trading, as Wall Street surges overnight. Stock markets in the Middle East traded sideways, EGX30 rose 1.4 percent. More commentary on oil prices, currencies and precious metals.

Traders work on the floor at the New York Stock Exchange (NYSE) at the end of the day's trading in Manhattan, New York, U.S., August 27, 2018.

Traders work on the floor at the New York Stock Exchange (NYSE) at the end of the day's trading in Manhattan, New York, U.S., August 27, 2018.

REUTERS/Andrew Kelly
  • Asian shares follow Wall Street higher
  • Middle East markets traded sideways on Wednesday
  • Oil prices soared 8 percent on Wednesday, edged lower on Thursday
  • Dollar steadies, gold edges higher

Global markets

Asian shares rose in early trading on Thursday, following a surge on Wall Street overnight.

United States stocks soared on Wednesday with the Dow Jones Industrial Average rocketing more than 1,000 points.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up about 0.9 percent and away from eight-week lows.

“Investors are aware of negative factors, but they aren’t paying attention to those. They are looking at the Dow’s $1,000 gain...Short-covering will likely be a major theme today,” Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told Reuters.

Middle East markets

The Saudi stock markets ended the day mainly flat on Wednesday. Saudi Basic Industries, the biggest petrochemical producer, fell 1.2 percent, while National Commercial Bank shed 1.4 percent.

The Dubai index inched up 0.1 percent with Union Properties rebounding 3.5 percent and GFH Financial, the most heavily traded Dubai stock, rising 5.5 percent.

Neighbouring Abu Dhabi’s index edged up 0.3 percent.

Qatar’s index edged 0.11 percent lower, as Qatar Islamic Bank fell 1.1 percent. But United Development rose 0.8 percent after saying it had finalised a sale agreement with an unnamed strategic Qatari investor for a plot at The Pearl Qatar project, for which it is master developer.

Egypt's blue-chip index snapped a three-day losing streak, rising 1.4 percent with 26 of its 30 stocks gaining. Banks, which were hit hard by proposed changes to taxation of their income from Treasury holdings, continued to rebound with the largest lender, Commercial International Bank , adding 1.3 percent.

Kuwait’s premier market index dropped 0.30 percent, while Bahrain’s index gained 0.4 percent and Oman’s index rose 0.31 percent.

Oil prices

Oil prices rose close to 8 percent in the previous session on Wednesday, but retreated in early trading on Thursday.

Brent crude oil futures were down 8 cents, or 0.15 percent, at $54.39 a barrel by 0237 GMT. They rose 8 percent to $54.47 a barrel the day before.

U.S. West Texas Intermediate (WTI) crude futures fell 0.19 percent to $46.13 per barrel. They jumped 8.7 percent to $46.22 per barrel in the previous session.

Shim Hye-jin, a commodity analyst at Samsung Securities in Seoul, told Reuters that oil prices were still low despite gains made the day before.

“But if OPEC’s cuts are fulfilled, WTI prices are expected to rise to $50-60 a barrel, while Brent is expected to go up to between $58-70 a barrel next year.”

Currencies

The dollar held firm on Thursday, after it rose in the previous session.

The dollar index, which measures the greenback against a basket of six major currencies, was steady at 96.91, after gaining 0.5 percent on Wednesday.

Precious metals

Gold prices edged up on Thursday, on worries about global economic growth.

Spot gold rose 0.4 percent to $1,271.85 per ounce by 0102 GMT. In the previous session, the metal hit $1,279.06 an ounce, its highest since June 19.

U.S. gold futures inched up 0.1 percent to $1,273.9 per ounce.

(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@refinitiv.com)

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