Stocks on major world markets gained yesterday, while oil prices surged more than three per cent on buying triggered by comments from an Saudi oil minister and a forecast that crude markets are set to tighten.
Major US stock indexes gained, climbing back near their all-time records. The pan-European FTSEurofirst 300 stock index climbed 0.5 per cent, its sixth day of gains in the past seven.
With bond yields low in developed economies as central banks maintain accommodative monetary policies, investors have sought out equities for yield.
US equity investors yesterday seized on labour data showing a drop in jobless claims and corporate updates from department store operators Macy’s and Kohls.
The Dow Jones industrial average rose 106.59 points, or 0.58 per cent, to 18,602.25, the S&P 500 gained 8.8 points, or 0.4 per cent, to 2,184.29 and the Nasdaq Composite added 16.70 points, or 0.32 per cent, to 5,221.29.
The energy sector was the best-performing major S&P group, buoyed by the rise in oil prices.
MSCI’s all-world index rose 0.4 per cent to nearly a year high, for a fifth session of gains out of the past six.
Oil prices rose after comments from the Saudi oil minister about possible action to stabilise prices triggered a round of buying and the International Energy Agency forecast crude markets would tighten in the second half of 2016.
Brent futures rose $1.49 to $45.54 a barrel, a 3.4 per cent gain. US crude rose $1.39 to $43.10.
The New Zealand dollar rallied to its highest in more than a year after the country’s central bank cut rates by 25 basis points to two per cent, less than some investors had expected.
The New Zealand dollar, or kiwi, was up nearly one per cent against the US dollar, after rising to its highest point since May 2015.
The US dollar was little changed against a basket of six currencies.
US Treasury prices fell as investors reduced their bond holdings in advance of a $15 billion sale of 30-year bonds.
Benchmark 10-year Treasury notes were down 6/32 in price for a yield of 1.522 per cent.