Global Stocks Steady -- Update

By Riva Gold 

Global stocks were steady at the start of the third quarter amid hopes that central banks would remain supportive following the U.K.'s vote to exit the European Union.

The Stoxx Europe 600 inched up 0.2% in morning trade, building on its largest three day percentage gain since November 2011. Bank of England Gov. Mark Carney signaled Thursday that further interest-rate cuts will be needed following the U.K.'s June 23 referendum, boosting stocks while pressuring the British pound.

London's export-oriented FTSE 100 index rose 0.4%, on track for its best week since 2010.

The auto sector led gains in broader European equity markets on Friday, with shares of Volkswagen AG up 4.6%.

News reports that the European Central Bank is considering loosening its rules for bond purchases have also been supportive in recent sessions, helping Spanish and Italian bonds gain sharply.

"If these reports are confirmed, this removes the risk of a post-referendum spike in peripheral bond spreads," strategists at Deutsche Bank wrote in a note. Still, the bank says, other "Brexit" risks for European equities remain, including weakness in European banks and the chance of further dollar strength.

Futures markets pointed to a small opening loss for the S&P 500, which closed out Thursday with its fourth consecutive month of gains.

Outside Europe, "most countries are going on business as usual," said Peter Marber, head of emerging markets at Boston-based fund Loomis Sayles & Co. "People have already begun to forget about Brexit," he said.

In currencies, the pound was down 0.3% against the dollar at $1.3305. The euro was down 0.1% against the dollar at $1.1099, while the dollar fell 0.6% against the yen to Yen102.5230.

Asian markets largely advanced as a strong close on Wall Street and in Europe rippled overseas. Japan's Nikkei Stock Average added 0.7%, while shares in Australia added 0.3%.

Stocks in Shanghai inched up just 0.1% after two gauges of Chinese manufacturing activity weakened Friday, suggesting second-quarter growth may be slower than the first. Still, the services sector improved, reassuring some investors about the health of the world's second-largest economy. Markets in Hong Kong were closed.

In commodities, gold gained 1.3% to $1,337 an ounce.

Brent crude oil fell 0.4% to $49.53 a barrel. While oil prices have recovered in recent sessions, "a cloud of political uncertainty has covered the European continent, warranting a sharp reduction in global economic growth and global oil demand expectations," strategists at Barclays wrote in a note.

Write to Riva Gold at [e-mail]

(END) Dow Jones Newswires

July 01, 2016 05:36 ET (09:36 GMT)

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