Stocks Steady, Pound Jumps on Brexit Court Ruling

تم نشره في Thu 3 November / Nov 2016. 01:00 AM
  • A two Euro coin is pictured next to a one Pound coin on top of a portrait of Britain's Queen Elizabeth in this file photo illustration shot March 16, 2016. – (REUTERS)

NEW YORK — Global equity prices, rattled by worries about the US presidential election, steadied on Thursday after a UK court ruled that the British parliament must approve a government decision to trigger Brexit, lifting the pound to a three-week high.

US Treasury prices slipped after the Bank of England scrapped plans to cut interest rates and projected higher inflation, while oil prices remained weak.

"The market is having a bit of a rethink about the slide in the past few days, and the UK court decision this morning is also lifting equities a little bit," said Michael Baughen, global investment specialist at JP Morgan Private Bank in Tampa.

The court decision, which will be appealed in early December, appeared to offer hope to investors who worry Prime Minister Theresa May's cabinet is set on a "hard" exit from the EU. The sterling topped USD1.24 for the first time in three weeks GBP=D4.

Tension in markets, rattled this week by a tightening race between Democrat Hillary Clinton and Republican Donald Trump, eased a little after the UK court ruling.

The Dow Jones industrial average .DJI rose 35.2 points, or 0.2 percent, to 17,994.84, the S&P 500 .SPX gained 2.82 points, or 0.13 percent, to 2,100.76 and the Nasdaq Composite .IXIC dropped 5.03 points, or 0.1 percent, to 5,100.54.

"Any news that might indicate that Brexit is not necessarily a certainty or could be delayed is going to be positive for the pound and the markets in general," said John De Clue, chief investment officer, The Private Client Reserve of US Bank in Minneapolis.

Facebook (FB.O) shares fell as much as 5.5 per cent and were the biggest drag on the S&P and the Nasdaq, a day after the social media giant warned that revenue growth would slow this quarter.

European shares looked set to end an eight-day losing streak on solid corporate results. Europe's broad FTSEurofirst 300 index .FTEU3 was up 0.19 per cent at 1,310.90.

In bond markets, US Treasury prices dipped, with long-dated bonds underperforming.

The Bank of England scrapped plans to cut interest rates and indicated that inflation is likely to rise further. It ramped up its forecasts for growth and predicted that inflation would jump to 2.7 per cent this time next year, nearly triple its current level.

Benchmark 10-year notes US10YT=RR were down 4/32 in price to yield 1.81 percent, up from 1.80 per cent late on Wednesday.

The US dollar stabilized from multi-week lows against a basket of major currencies on reduced US election fears after a New York Times/CBS a poll showed Clinton maintained a narrow lead over Trump.

The dollar index .DXY, which measures the greenback against a basket of six major currencies, was still down 0.11 per cent on the day at 97.295. That was an improvement from an earlier 0.3 per cent drop to a more than three-week low of 97.041.

A New York Times/CBS poll of 1,333 registered voters found Clinton ahead by 3 percentage points, at the cusp of the Oct. 28-Nov. 1 survey's margin of error. Analysts said the poll helped the dollar recover.

Oil prices dipped, with losses limited as an attack on a Nigerian pipeline cut the country's output even as investors remained skeptical about OPEC's planned production limit and surprised at this week's build in US crude inventories.

Brent crude LCOc1 was down 0.45 per cent at USD46.65 a barrel, while US crude CLc1 was down 0.82 per cent at USD44.97.

Gold fell, driven by US Federal Reserve signals suggesting that it could raise interest rates next month, while investors closely watched developments in the US presidential election campaign.

Spot gold prices XAU= were up 0.13 per cent to USD1,298.62.