Oil price rise helps shore up global markets

AP News
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Posted: May 12, 2016 7:47 AM
Oil price rise helps shore up global markets

LONDON (AP) — A bounce-back in oil prices helped European stock markets to recover their poise Thursday following an earlier retreat when concerns over the state of U.S. consumer spending weighed on shares.

KEEPING SCORE: In Europe, France's CAC 40 was up 0.9 percent to 4,355 while Germany's DAX rose 0.9 percent to 10,067. The FTSE 100 index of leading British shares was 0.4 percent higher at 6,187. Wall Street was poised for a solid opening with Dow futures and the broader S&P 500 futures up 0.5 percent.

OIL GAINS: A barrel of benchmark New York crude was up 41 cents at $46.64 while the international standard Brent was 26 cents higher at $47.87. The increases are signs that traders are getting less concerned about the global economic outlook which should help support business activity. The mood was helped by a report from the International Energy Agency that higher than expected Iranian oil production has helped stabilize the global oil market by offsetting concerns generated by wildfires in Canada and violence in Nigeria.

ANALYST TAKE: "A breakout in oil prices, which comes despite a Saudi commitment to keep the taps firmly in the 'on' position, seems to be helping risk appetite," said Chris Beauchamp, senior market analyst at IG.

BREXIT FOCUS: Bank of England Governor Mark Carney will be in the spotlight when he presents the central bank's latest economic projections following its decision to keep its main interest rate unchanged at 0.5 percent. What happens in the event that Britain votes to leave the European Union in a referendum on June 23 is likely to be the main focus at the press briefing. Recent reports have suggested that the Bank of England has warned banks to prepare for a rate reduction if the U.K. votes to leave the 28-nation bloc.

ASIA's DAY: Japan's Nikkei 225 stock index rose 0.4 percent to 16,646.34, while the Hang Seng index of Hong Kong dropped 0.7 percent to 19,915.46. South Korea's Kospi lost 0.1 percent to 1,977.49 and Australia's S&P/ASX 200 fell 0.2 percent to 5,359.30.

CURRENCIES: The euro was down 0.3 percent at $1.1389 while the dollar rose 0.8 percent to 109.27 yen.