Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


While you were sleeping: Stocks, pound rebound

While you were sleeping: Stocks, pound rebound

June 29 (BusinessDesk) - Equities on both sides of the Atlantic rose as investors picked up some bargains following a two-day Brexit-inspired rout amid expectations that central banks will follow through on their promise to help if needed.

Europe’s Stoxx 600 Index finished the day with an advance of 2.6 percent from the previous close. Germany’s DAX index rose 1.9 percent, the UK’s FTSE 100 index rallied 2.6 percent, while France’s CAC 40 index also added 2.6 percent.

“Stocks are rebounding on the expectation that there will be a coordinated intervention by central banks,” John Plassard, a senior equity-sales trader at Mirabaud Securities in Geneva, told Bloomberg. “What central banks can do is put confidence back in the market by telling everyone that they are here and ready to act. If we don’t get that sort of support, we’ll see further declines.”

Wall Street also rose. In 2.49pm New York trading, the Dow Jones Industrial Average gained 1.1 percent, while the Nasdaq Composite Index rallied 1.8 percent. In 2.34pm trading, the Standard & Poor’s 500 Index climbed 1.2 percent.

"This is a very volatile and churning environment," Eric Wiegand, senior portfolio manager at US Bank in New York, told Reuters. "It's not going to be the blank summer months that we had grown accustomed to."

Gains in shares of Travelers Cos and those of JPMorgan Chase, up 2.9 percent and 2.2 percent recently, propelled the Dow higher. Shares of DuPont dropped, posting the largest percentage decline in the Dow in afternoon trading with a slide of 3.4 percent.

Meanwhile, the latest US economic data showed gross domestic product grew at a 1.1 percent annual pace in the first quarter, exceeding the previously reported 0.8 percent increase. Even so, concern about Brexit and its impact on financial markets and the global economy might weigh on consumers, some analysts said.

"The test comes in the next few months as the turbulence in financial markets may affect consumers' behaviour and also weigh on business investment," Ryan Sweet, senior economist at Moody's Analytics in West Chester, Pennsylvania, told Reuters. "If financial markets settle down, the effect of the British referendum on the US economy will be very small."

The British pound rose, rebounding from the lowest level in more than three decades, gaining for the first time since last week’s referendum but the outlook remains murky at best.

“I wouldn’t put too much weight on this move—we’re in uncharted territory now,” Rob Carnell, chief international economist at ING Bank, told the Wall Street Journal. Carnell sees the pound falling to US$1.25 due to the continued post-Brexit uncertainty. “I wouldn’t be going out and filling my boots with sterling,” he said.

In an auction aimed to boost liquidity, the Bank of England allotted 3.072 billion pounds to the nation’s lenders, after having received bids totalling 6.3 billion pounds.

“It’s becoming more competitive for liquidity and we can see that there are some modest signs of stress outside of the equity prices, where there are much clearer signs of stress,” Philip Rush, an economist at Nomura International, told Bloomberg. “This is a higher call for liquidity than the banking system has asked for for a long time, but 3 billion pounds in the grand scheme of things is relatively low. It could have been a lot worse.”


© Scoop Media

Business Headlines | Sci-Tech Headlines


Statistics: Business Research And Development Up 29 Percent

Computer services and machinery manufacturing firms led the way in an almost 30 percent lift in business spending on research and development (R&D) in 2016, Stats NZ said today. Businesses spent $1.6 billion on R&D in 2016, up $356 million (29 percent) from 2014. More>>


China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>


Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>


Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>


Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news