LONDON: Stocks markets stabilised on Wednesday as expectations of support from the European Central Bank offset a decline in the price of oil.
Oil prices fell as worries after Kuwaiti workers ended a three-day strike that had halved the nation’s crude output . That revived the bearish mood brought last weekend when major producers failed to agree on a cut in output.
Global stock markets initially fell, but the FTSEurofirst 300 index of top European shares recovered to edge into positive territory.
U.S. equity futures also rose. The MSCI All-Country World index was flat.
The ECB is not expected to make any policy changes at its meeting on Thursday. But it is expected to reiterate its plans to support the euro zone economy, which was enough to steady markets, analysts said.
“Investors have realised that the Doha meeting was a flop. Nevertheless, one cannot deny that buying momentum in stock markets remains present, which should prevent equity indexes from losing too much ground,” said Mirabaud Securities’ senior equity sales trader John Plassard.
“This should be even more evident given the ECB meeting tomorrow which could again keep up that momentum,” he added.
Commodity-linked currencies such as the Australian and Canadian dollars also approached recent peaks on Wednesday while German bund yields dipped.
“Bund auctions are usually an accident-prone event, but today there are no signs of any risks whatsoever and that’s certainly encouraging heading into the ECB meeting,” said David Schnautz, a Commerzbank interest rate strategist.
Copyright Reuters, 2016
Courtesy : BRecorder