US equities posted strong gains when risk appetite improved after the oil price rally. A report indicated that Saudi Arabia and Russia already reached a deal to freeze output ahead of the Doha meeting on April 17. The source also mentioned that these countries are willing to push through with the deal regardless of Iran’s participation.
The Dow 30 index closed 164.84 points up to 17,721.25 (+0.94%), the S&P 500 index rose 19.73 points to 2,061.72 (+0.97%), and the Nasdaq advanced 38.69 points to 4,872.09 (+0.80%). Meanwhile, the S&P 500 VIX, which is considered a gauge of market uncertainty, edged down 1.41 points to 14.85 (-8.67%).
WTI crude oil rose to $41.70/barrel while Brent crude oil is up to $44.34/barrel. Gold dipped to $1,256.60/ounce on improved market sentiment drawing investors away from safe-haven holdings.
European equities also close higher
The pickup in risk-taking was also seen in European markets, as the German DAX closed 78.48 points higher to 9,761.41 and the French CAC 40 rose 33.28 points to 4,345.91 (+0.77%). Meanwhile, the London FTSE advanced 42.27 points to 6,242.39 (+0.68%).
UK inflation reports turned out better than expected, as the headline CPI rose from 0.3% to 0.5% while the core CPI climbed from 1.2% to 1.5%. The next event risk for the UK market is the Bank of England monetary policy statement on Thursday, although no actual interest rate changes are expected.
Asian markets take part in risk rallies
Asian equities are currently in the green, thanks to the pickup in risk sentiment. The Nikkei is up 328.90 points to 16,258.79 (+2.07%), the China A50 index is up 84.82 points to 9,650.55 (+0.92%), and the S&P ASX 200 index is up 50.35 points to 5,026.00 (+1.03%).
More jawboning remarks from Japanese officials are keeping investors cautious, especially since the US earnings season poses another set of uncertainties. The IMF lowered the global growth forecast from 3.4% to 3.2% this year, citing risks from the unsustainable Greek debt levels and a potential Brexit.
The latest batch of US earnings releases shows mixed results, with Alcoa reporting significant job cuts and weaker revenues from Nike. FedEx shares advanced 5% on stronger earnings and revenue figures while Adobe raised profit forecasts on positive momentum for its cloud offerings. Other catalysts for the day include the Bank of Canada interest rate statement and the release of US crude oil inventories data.
To contact the reporter of the story: Samuel Rae at firstname.lastname@example.org