Global shares gain as investors look to new quarter, U.S. growth

Mon Jul 1, 2013 9:20am EDT
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By Richard Hubbard

LONDON (Reuters) - World shares and oil rose on Monday as investors edged back into riskier assets at the start of a new quarter, pinning their hopes on a solid U.S. economic recovery and brushing off signs of a slowdown in China.

Data showing Europe's downturn stabilizing and a clear improvement in Japan added to the hopes the world economy was entering the second half on a firmer footing, though much depends on a reading of U.S. factory activity due at 1400 GMT.

Wall Street is expecting the Institute for Supply Management (ISM) index of national factory activity to show a slight rise from May, setting the stage for a firmer open to trading .N

This would add to gains of 0.3 percent in MSCI's world equity index .MIWD00000PUS as it bounced back from its first quarterly loss since the same period of 2012.

European shares reflected the positive tone, gaining 0.7 percent .FTEU3 but volumes were light as traders await the U.S. economic report. Brent crude edged higher too, rising nearly $1 a barrel to $103.10.

Markets are highly sensitive to U.S. data at present because it will shape the timetable for the Federal Reserve to taper its $85-billion-a-month in asset purchases, which have supported stocks, bonds and commodities worldwide.

"People are either sitting on their hands or taking a much shorter-term view," Matt Basi, sales trader at CMC Markets, said.

Many major equity indexes had hit record highs in May but then fell back after U.S. Federal Reserve chief Ben Bernanke confirmed the Fed would soon scale back the stimulus program that had been behind the rally.   Continued...

Electronic information boards display market information at the London Stock Exchange in the City of London January 2, 2013. REUTERS/Paul Hackett