HomeBusinessMoneyOil and equities bounce back from last week's tumble

Oil and equities bounce back from last week’s tumble

Oil prices soared and stocks rebounded Monday on bargain-buying after last week’s retreat, with traders riding a wave of renewed optimism.

In oil markets, both main contracts enjoyed big gains of over five percent, while in equities, major Wall Street indices closed solidly higher, with the Nasdaq scoring a record.

“Markets enter the new week with some renewed optimism, having ended the previous week’s tumultuous ride in positive fashion,” noted Interactive Investor analyst Richard Hunter.

After suffering heavy losses recently owing to concerns the Delta variant of the coronavirus would impact demand as countries order new restrictions, investors were reassured by the fact China reported no new local Covid-19 cases on Monday for the first time since July.

Fears about the much more contagious variant have rattled world markets as it forces some governments to reimpose containment measures, which depresses demand for oil, since people cannot travel.

Monday’s positive vibes were reinforced by stronger-than-expected US existing home sales data for July.

Traders globally are looking ahead to the Jackson Hole annual central banking conference, and specifically Fed Chair Jerome Powell’s speech on Friday, where he could offer hints about a timetable for tapering the bank’s massive bond purchases used to support the economy through the pandemic.

The bond-buying program and record-low interest rates have been key elements of the global recovery for more than a year.

But sentiment was jolted last week by minutes from the US Federal Reserve’s July meeting indicating it could start slowing bond purchases by year-end.

However, Dallas Federal Reserve chief Bob Kaplan, who is considered an inflation hawk, suggested he could rethink his view of tapering soon in light of the Delta variant’s global march, which is showing signs of hobbling economic growth.

But San Francisco Fed President Mary Daly, who is considered more of a dove, said she believes the economic recovery has enough momentum to allow it to withstand the Delta variant.

In an interview with Fox Business Network, she said she is “confident that we will by the end of the year” have made sufficient progress to allow the central bank to start “dialing back” stimulus.

Bitcoin topped $50,000 on Monday for the first time in three months after supportive news from payments giant PayPal and cryptocurrency platform Coinbase.

The world’s most popular virtual unit jumped to $50,440 during Asian trading, before dropping back to around $49,480 after the close on Wall Street.

“Bitcoin continues its recent recovery… as PayPal announces plans to launch its cryptocurrency trading platform in the UK,” said AJ Bell analyst Danni Hewson.

Federal Reserve boss Jerome Powell’s speech to the Jackson Hole symposium will be closely followed for clues about the bank’s taper plans Photo: GETTY IMAGES NORTH AMERICA / WIN MCNAMEE

PayPal will this week begin to allow users in Britain to buy, hold and sell cryptocurrency through the online payment platform for the first time.

New York – Dow: UP 0.6 percent at 35,335.71 (close)

New York – S&P 500: UP 0.9 percent at 4,479.53 (close)

New York – Nasdaq: UP 1.6 percent at 14,942.66 (close)

EURO STOXX 50: UP 0.7 percent at 4,176.42 (close)

London – FTSE 100: UP 0.3 percent at 7,109.02 (close)

Frankfurt – DAX 30: UP 0.3 percent at 15,852.79 (close)

Paris – CAC 40: UP 0.9 percent at 6,683.10 (close)

Tokyo – Nikkei 225: UP 1.8 percent at 27,494.24 (close)

Hong Kong – Hang Seng Index: UP 1.1 percent at 25,109.59 (close)

Shanghai – Composite: UP 1.5 percent at 3,477.13 (close)

Euro/dollar: UP at $1.1744 from $1.1698

Pound/dollar: UP at $1.3725 from $1.3623

Euro/pound: DOWN at 85.57 pence from 85.87 pence

Dollar/yen: DOWN at 109.67 yen from 109.78 yen

West Texas Intermediate: UP 5.3 percent at $65.46 per-barrel

Brent North Sea crude: UP 5.2 percent at $68.57 per-barrel

Copyright AFP. All rights reserved.

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