Stocks Rebound in Europe
12 February 2016 - 10:00AM
Dow Jones News
A rally in energy and banking shares lifted European markets and
U.S. futures Friday, even as Japan's main index fell to its lowest
level in more than a year as it caught up with a sharp selloff in
the previous session.
The Stoxx Europe 600 was up 1.8% in early trade, while stock
futures pointed to a 0.8% opening gain for the S&P 500. Changes
in futures don't necessarily reflect market moves after the opening
bell.
Boosting sentiment, Brent and WTI crude oil futures both jumped
over 4% to $31.28 a barrel and $27.36 respectively before paring
gains slightly.
Oil prices got a lift after the U.A.E. energy minister said OPEC
was ready to cooperate on production cuts, though many analysts
remain skeptical on an agreement being reached.
Global markets sold off sharply Thursday, with the Dow Jones
Industrial Average falling 254 points as investors moved out of
equities and commodities and bought government bonds and other
haven assets. The 10-year U.S. Treasury note fell to its lowest
level since May 2013 as investors fled to safety. Yields fall as
prices rise.
The selloff followed cautious comments from Federal Reserve
Chairwoman Janet Yellen Wednesday regarding further rate increases
that added to concerns over the health of the global economy.
"Janet Yellen put a mirror in front of the market, and they
didn't like the picture," said Didier Duret, chief investment
officer at ABN AMRO private banking.
Ms. Yellen's comments also accelerated the Japanese yen's sharp
rise against the dollar, which hurts the competitiveness of
Japanese exporters.
Japan's Nikkei Stock Average fell 4.8% Friday as it reopened
from a holiday, bringing losses for the week to over 11%, as the
yen continued to rise against the dollar. The dollar was last down
0.1% against the yen at ¥ 112.17.
A close adviser to Prime Minister Shinzo Abe said that the Bank
of Japan may call an emergency meeting to undertake additional
monetary easing if financial markets remain turbulent.
"A strong yen and negative interest rates is a bad marriage,"
said Mr. Duret, noting the pain in Japan could raise fears about
the impact of negative interest rates in Europe. Still, he doesn't
believe a global recession is coming.
Stocks elsewhere in Asia deepened their rout, catching up with
steep losses in the U.S. and Europe in the previous session.
Australia's S&P ASX 200 closed down 1.2%.
In Europe, banks stocks staged a relief rally to trade up 2.9%,
while mining shares also recovered some of recent losses.
Shares in Germany's Commerzbank AG soared 14% Friday after the
bank said it would pay its first dividend for five years.
Still, the banks remain down 26% this year. European banks fell
sharply Thursday on concerns over slowing global growth and the
impact of negative interest rates on bank earnings.
Investors will examine data releases later Friday for clues on
the health of the global economy, with figures on U.S. retail sales
and consumer sentiment due, and the eurozone reports its latest
growth and industrial output numbers.
In currencies, the euro was down 0.3% against the dollar at
$1.1285, even after data showed Germany's economy remained on a
steady yet modest growth path at the end of last year.
Gold fell 0.7% to $1238.80 an ounce, after gold gained 4.5%
Thursday to its highest level in a year.
Chao Deng, Biman Mukherji and Nina Adam contributed to this
article
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
February 12, 2016 04:45 ET (09:45 GMT)
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