Major world stock markets were poised for their biggest weekly advance since 2011 yesterday, as greater investor appetite for riskier assets propelled gains in equities and a surge in commodities and crude oil prices.
Declines in the dollar, a bullish oil forecast and giant miner Glencore’s pledge yesterday to slash world zinc output by four per cent have lifted beaten-down commodities, with Brent crude oil headed for its biggest weekly rise since March 2009.
The US dollar hit a three-week low against the euro as minutes from the Federal Reserve’s September policy meeting showed the Fed in no rush to raise interest rates.
The MSCI all-country world equity index climbed 0.6 per cent, for its eighth daily gain. It was up 4.3 per cent for the week, its biggest weekly advance since 2011.
The 19-commodity Thomson Reuters/Core Commodity CRB Index, a global benchmark for commodities, was up 4.8 per cent on the week and was poised for its biggest gain since 2012.
Zinc jumped more than 11 per cent, in its biggest daily gain in seven years, after the Glencore news. Glencore shares were on track for a gain of about 40 per cent on the week, their biggest weekly rise since being floated in mid-2011, and doubling from a record low reached only two weeks ago.
US stocks were modestly lower, as concerns over the outlook for earnings weighed on sentiment. Aluminum company Alcoa shares were down 5.4 per cent following disappointing results.
The Dow Jones industrial average fell 19.44 points, or 0.11 per cent, to 17,031.31, the S&P 500 lost 5.42 points, or 0.27 per cent, to 2,008.01 and the Nasdaq Composite added 1.79 points, or 0.04 per cent, to 4,812.58.
Still, for the week, the S&P 500 was on track for its best gain since December, with the S&P energy index up about 7.7 per cent.
The FTSEuroFirst index of the leading 300 European shares closed up 0.4 per cent.
In the foreign exchange market, the euro was last up 0.59 per cent against the dollar at $1.12430, while a dollar index was down 0.6 per cent.
Brent crude oil futures were down 0.2 per cent at $52.96 but on course for a rise of more than 10 per cent on the week, which would be its biggest weekly gain since 2009.
US crude was up 0.8 per cent at $49.82 a barrel. Oil got a boost overnight after forecaster PIRA Energy Group predicted crude prices would rise to $70 per barrel by the end of 2016.
Three-month zinc futures were up 11.2 per cent on the London Metal Exchange at $1,854 a tonne after Glencore said it will cut production by 500,000 tonnes, a third of its output and equivalent to four per cent of the world’s production.