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GLOBAL MARKETS-Europe leads stock market recovery on firmer business growth

Stock MarketsMay 05, 2021 16:50
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© Reuters.

* European stocks set for best day in nearly two months
* NASDAQ futures edge up after selloff in high caps
* Dollar hits highest in over two weeks
* Oil at near 7-wk high

By Tom Arnold and Wayne Cole
LONDON/SYDNEY, May 5 (Reuters) - Global shares edged up on
Wednesday as U.S. stock futures steadied after a pullback in
tech darlings while European markets were buoyed by accelerating
business activity and positive earnings.
The Euro STOXX index .STOXX added 1.3%, heading for its
best day in nearly two months, helped by data showing euro zone
business activity quickened last month, while the services
industry returned to growth. Top performers included Germany's Rational RAAG.DE and
Merck MRCG.DE after well-received numbers.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was trading 0.1% higher after a sell-off
on Tuesday from near record highs.
It wasn't all rosy, however. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS sank 0.4% for
its fourth consecutive day of losses, although Asian trading was
thin due to holidays in Japan, China and South Korea.
India's Nifty 50 .NSEI was 0.8% higher and headed for its
best day in a week as the central bank rolled out a series of
measures to support the coronavirus-ravaged economy, including
allowing certain small borrowers more time to repay loans.
Nasdaq futures NQc1 were up 0.4% after a sharp fall
overnight, while S&P 500 futures ESc1 also added 0.3%.
The Nasdaq had dropped 1.9% on Tuesday as some big tech
names ran into profit-taking, including Microsoft Corp MSFT.O ,
Alphabet Inc GOOGL.O , Apple Inc AAPL.O and Inc
Stretched valuations were tested when U.S. Treasury
Secretary Janet Yellen said rate hikes may be needed to stop the
economy overheating. She later walked back the comments, but it reminded
investors that rates would have to rise at some point in the
"Some of her comments were seemingly misinterpreted by
markets as her suggesting the Fed would need to hike," said
James Athey, investment director at Aberdeen Standard
"This market really is just as febrile and fragile as that."
The next focal point for markets looms on Friday when U.S.
payrolls data are forecast to show a hefty rise of 978,000,
while some estimates go as high as 2.1 million.
So far, Federal Reserve Chair Jerome Powell has argued the
labour market is still far short of where it needs to be to
start talking of tapering asset buying.
Minneapolis Fed Bank President Neel Kashkari, a notable
dove, on Tuesday said it may take a few years for the economy to
get back to full employment. The Fed's dogged patience allowed yields on U.S. 10-year
notes US10YT=TWEB to ease back to 1.59%, from last week's top
of 1.69%, though the market has struggled to break below 1.53%.
In Europe, Germany's 10-year yield DE10YT=RR , the
benchmark for the region, was up 1 basis point to -0.23%,
although below its highest since March 2020 hit on Monday.
Just the mention of higher U.S. rates was enough to help the
dollar recoup a little of its recent losses.
The euro dropped back to $1.1999 EUR= and threatened to
breach important chart support in the $1.1995/1.2000 area. A
break would open the way to a retracement target at $1.1923.
The dollar held at 109.45 yen JPY= , having shied away from
resistance at 109.61. Against a basket of currencies, the
dollar =USD touched a near two week high of 91.448.
The New Zealand dollar blipped higher to $0.7173 NZD=D3
when local jobs data proved stronger than expected. In commodity markets, palladium XPD= rose 0.7% to $3,004,
near to the record high hit on Tuesday on worries over short
supplies of the metal used in emissions controlling devices in
automobiles. GOL/
Gold was left lagging at $1,777 an ounce XAU= .
Oil prices climbed to multi-week peaks as more countries
opened their borders to travellers, improving the demand outlook
for petrol and jet fuel. O/R
Brent LCOc1 added 1.2% to $69.69 a barrel, near its
highest since mid-March, while U.S. crude CLc1 rose 1.1% to
$66.43 per barrel, having earlier climbed to the most since
March 8.

Asia stock markets
Asia-Pacific valuations
MSCI's World Stock Index
Daily COVID-19 case load in India
(Editing by Sam Holmes and Kim Coghill)

GLOBAL MARKETS-Europe leads stock market recovery on firmer business growth

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