World equity markets and oil prices rebounded yesterdeay after US House Republican leaders said they would seek to break a government budget impasse next week, while the yen was lower against the US dollar ahead of potential asset purchases by the Bank of Japan.
Brent and US crude futures rose in choppy trading, reacting to news that the House of Representatives will consider a Bill to raise the US debt ceiling enough to allow the country to pay its bills for another three months.
Stocks on Wall Street pared losses on news of the new Republican strategy.
Earlier, US stocks had faltered on a survey that showed US consumer sentiment at its lowest in over a year in January and a disappointing earnings outlook from chipmaker Intel.
The Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment came in at 71.3, down from 72.9 the month before.
The index was at its lowest since December 2011.
US Treasury debt prices extended modest gains. The US benchmark 10-year Treasury note ticked up 11/32 in price to yield 1.8453 per cent.
The Dow Jones industrial average was up 6.32 points, or 0.05 per cent, at 13,602.34. The Standard & Poor’s 500 Index was up 0.16 points, or 0.01 per cent, at 1,481.10. The Nasdaq Composite Index was down 8.23 points, or 0.26 per cent, at 3,127.78.
Disappointing economic data in the UK helped pushed European shares downward. The FTSEurofirst 300 index of top shares closed 0.16 per cent lower at 1,163.64.
China reported that its economy grew at a slightly faster-than-expected 7.9 percent in the fourth quarter of 2012, a clear sign it has avoided a sharp economic slowdown, though the annual growth rate was its weakest in 13 years.
The China data came on top of strong US labour and housing market reports on Thursday, providing fresh impetus to a broad rally in equities, precious metals and commodities since the start of the year.
MSCI’s index of leading world shares hit its highest level since May 2011 at 351.70, but later gave back some gains to trade up at 351.47.
Spot gold retreated $2.11 to $1,685.10 an ounce.
Sources familiar with the BOJ’s thinking told Reuters the central bank, under relentless pressure from Japan’s Prime Minister Shinzo Abe, will consider making an open-ended commitment to buy assets until 2 percent inflation is in sight.
The euro last traded 0.2 per cent lower against the yen at 119.96 yen, down from 120.70 earlier – its highest since May 2011.
The euro was also down against the dollar, falling 0.36 per cent on the day to $1.3327.