Commodity surge lifts world equities; dollar falls

Fri Oct 9, 2015 5:26pm EDT
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By Caroline Valetkevitch

NEW YORK (Reuters) - Stocks on major world markets posted their biggest weekly advance since 2011 on Friday, as greater investor appetite for riskier assets propelled gains in equities and a surge in commodities and crude oil prices.

Declines in the dollar, a bullish oil forecast as well as miner Glencore's (GLEN.L: Quote) pledge Friday to slash world zinc output have lifted beaten-down commodities. Brent and U.S. crude oil gained about 9 percent for the week, the biggest weekly percentage increase in six weeks.

The U.S. dollar hit three-week lows against the euro and Swiss Franc as minutes from the Federal Reserve's September policy meeting showed the Fed in no rush to raise interest rates.

The MSCI all-country world equity index .MIWD00000PUS climbed 0.7 percent for its eighth daily gain. It was up 4.4 percent for the week, its biggest weekly advance since December 2011.

The 19-commodity Thomson Reuters/Core Commodity CRB Index .TRJCRB, a global benchmark for commodities, was up 4.4 percent on the week, its best gain since 2012.

"After a harsh selloff in commodities, followed up by the recent weakness for global equities over global growth concerns, we are now having a risk-on trade," said Chris Jarvis, commodities analyst at Caprock Risk Management in Frederick, Maryland, referring to investors' appetite for assets considered riskier such as stocks and commodities.

Zinc jumped about 10 percent in its biggest daily percentage gain in at least 35 years, after the Glencore news. [nL3N1285EM] Glencore shares gained 35.9 percent on the week, their biggest weekly rise since being floated in mid-2011, and doubling from a record low reached only two weeks ago.

U.S. stocks ended slightly higher, though the Standard & Poor's 500 index put in its best weekly gain of the year. Concerns over the outlook for third-quarter earnings weighed on sentiment Friday. Aluminum company Alcoa Inc's (AA.N: Quote) shares were down 6.8 percent at $10.26 following disappointing results.   Continued...

Traders work on the floor of the New York Stock Exchange October 5, 2015. REUTERS/Brendan McDermid