Global equity markets rose yesterday on optimism Greece would accept an aid-for-reforms deal and on strong US retail sales, which lifted the US dollar and bolstered expectations the Federal Reserve will raise interest rates this year.
European shares pared gains after the International Monetary Fund’s delegation broke off talks in Brussels and flew home because of major differences with Athens. A Greek government spokesman later said Greece wants to step up negotiations.
US retail sales rose 1.2 per cent in May after an upwardly revised 0.2 per cent gain in April, the Commerce Department said, as households boosted purchases of automobiles and other goods.
While other US data showed a slight increase in new applications for unemployment benefits, the number remained in territory associated with a tightening labor market.
European shares rose, with the auto sector gaining on an upbeat forecast from Daimler, while Greek shares rallied 8.2 per cent on hopes a resolution to its nagging debt woes was near. The market closed before the IMF news.
MSCI’s all-country stock index rose 0.12 per cent, while the pan-European FTSEurofirst 300 index closed up 0.59 per cent to 1,557.95, after being more than one per cent higher earlier in the session.
Stocks on Wall Street rose but remained in a months-long trading range.
“The choices for a lot of people remain stocks or bonds, and the resilience of stocks, even as rates have risen at least in the short run, has given people confidence that it's the better place of the two to be,” said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.
The Dow Jones industrial average rose 47.26 points, or 0.26 per cent, to 18,047.66. The S&P 500 gained 3.73 points, or 0.18 per cent, to 2,108.93 and the Nasdaq Composite added 0.95 points, or 0.02 per cent, to 5,077.64.The dollar rebounded from three weak days, gaining as much as 1.1 per cent against the yen after posting its biggest single-day drop in six months against the Japanese currency on Wednesday.
The dollar last traded at 123.60 yen, up 0.77 per cent on the day, and was up 0.81 per cent against the euro at $1.1232. The dollar index rose 0.61 per cent
British 10-year gilts posted their strongest one-day price gain in four weeks, tracking German bond prices higher after the IMF broke off talks with Greece.
Oil prices declined further due to a stronger dollar and a gloomy economic forecast by the World Bank. over a supply glut. Brent crude oil for July shed 92 cents to trade at $64.78 a barrel. US crude was down 95 cents at $60.48 a barrel.