Sunday outlook: World stocks, oil prices end the week higher

Global markets surged on Friday driven by expectations that China will add more money into its economy to weather a trade war with the United States. Kuwait's index made gains on Thursday as investors looked ahead to the stock market joining the FTSE Russell emerging market index next week. More commentary on oil prices, currencies and precious metals.

  
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 24, 2018.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 24, 2018.

REUTERS/Brendan McDermid
  • Global markets hit highest in six months on Friday
  • Kuwait’s index adds gains as investors look ahead to FTSE inclusion
  • Oil prices edge up slightly
  • Dollar surges, gold prices retreat

Global markets

Stock markets around the globe rose on Friday, hitting their highest levels in six months driven by expectations that China will add more money into its economy to weather a trade war with the United States.

MSCI’s gauge of stocks across the globe gained 0.30 percent to hit the highest level since March 13.

On Wall Street, The Dow Jones Industrial Average rose 86.52 points, or 0.32 percent, to 26,743.5. The S&P 500 lost 1.08 points, or 0.04 percent, to close at 2,929.67, and the Nasdaq Composite dropped 41.28 points, or 0.51 percent, to 7,986.96.

“There’s really been no bad news to cause this market to take a breather for weeks,” Michael Geraghty, equity strategist at Cornerstone Capital Group in New York, told Reuters.

“The risk for U.S. equity markets is what’s going on overseas.”

Middle East markets

Kuwait’s index made gains on Thursday as investors looked ahead to the stock market joining the FTSE Russell emerging market index next week.

The Kuwaiti premier market index added more than 1 percent during Thursday’s session, before closing 0.77 percent higher. Kuwait’s inclusion into FTSE Russell was first announced in September 2017. 

“Our view on the Kuwait market for the rest of 2018 remains constructive, and we expect the market to finish the year as one of the top performers in the GCC,” Faisal Hasan, chief business development officer at KAMCO, told Zawya by email on Thursday.

Telecom operator Zain rose 1.3 percent, Kuwait Finance House was up 2.4 percent and Boubyan Bank 3.0 percent.

Saudi Arabia’s index rose 0.5 percent, as Al Rajhi Bank and Petrochemical giant SABIC jumped 1.7 percent and 2.5 percent respectively.

In Dubai, the index rose 0.9 percent with 26 advancing stocks and 6 decliners. Dubai Islamic Bank rose 1.5 percent and Emirates NBD added 1.1 percent. Neighbouring Abu Dhabi’s index was mainly flat.

Egypt's stock market closed flat, following Wednesday's 3.8 percent plunge to its lowest close this year as liquidity tightened.

Qatar’s index dropped 0.4 percent, Kuwait’s index added 0.8 percent, Oman’s index gained 0.2 percent and Bahrain’s index was flat.

Oil prices

Oil prices edged up slightly on Friday but gave up most of the surge they incurred earlier in the day. Fears of tightening supply from upcoming sanctions on Iran have been supporting prices.

“The question is just how much oil is going to be taken off the market with U.S. sanctions on Iran,” Gene McGillian, director of market research at Tradition Energy in Stamford, Connecticut, told Reuters.

Global benchmark Brent crude settled 10 cents higher at $78.80 a barrel.

U.S. light crude rose 46 cents to $70.78 a barrel, more than $1 below the session high of $71.80.

U.S. crude rose 2.5 percent in the week and Brent posted a 0.7 percent weekly gain.

Currencies

The dollar index added gains on Friday on a weaker sterling.

Sterling was down 1.5 percent on Friday after British Prime Minister Theresa May said the European Union must offer an alternative Brexit proposal and that Brexit talks had hit an impasse.

Against a basket of six major currencies, the dollar index rose 0.32 percent to 94.216.

Precious metal

Gold prices fell on Friday on a stronger dollar.

Spot gold lost 0.8 percent at $1,196.86 per ounce by 1735 GMT. During the session it touched its lowest since September 11 at $1,191.51. However, prices headed for a 0.4 percent weekly increase.

U.S. gold futures for December delivery settled down $10, or 0.8 percent, at $1,201.30 per ounce.

(Writing by Gerard Aoun; Editing by Mily Chakrabarty)

(gerard.aoun@thomsonreuters.com)


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© ZAWYA 2018


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