Global stocks push higher as oil takes wild ride

Mon Sep 5, 2016 12:33pm EDT
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By Marc Jones

LONDON (Reuters) - Cooling U.S. rate hike expectations helped world shares notch up solid gains on Monday, though they came off highs as investors concluded an oil market pact between Saudi Arabia and Russia lacked substance.

Oil surged as much 5 percent on news the two mega producers had signed a deal to stabilise the market, including limiting output, but pared gains as the agreement led to no immediate action.

European stocks whipsawed in tandem, touching an eight-month high then reversing as trading wound down in the absence of U.S. markets, which were shut for a public holiday. [.N]

"Freezing production is one of the preferred possibilities," Saudi Energy Minister Khalid al-Falih said speaking alongside Russian counterpart Alexander Novak at the G20 summit in China. "But it does not have to happen specifically today."

Despite the wobbling around in Europe, MSCI's 46-country 'All World' share index held for a gain of 0.2 percent after a strong day for Asian markets.

Bonds were back in favour after payrolls numbers on Friday had tamed bets on a U.S. rate hike this month, while emerging market stocks were gunning for their best day since July with a jump of 1.3 percent. [EMRG/FRX]

"We don't expect the Fed to do anything until next year so that lays the ground for further advances," said TD Securities strategist Paul Fage.

Though the Fed reaction and oil price swings were the markets' main drivers, they were not the only factors in play.   Continued...

Traders work at their desks in front of the German share price index, DAX board, at the stock exchange in Frankfurt, Germany, September 2, 2016. REUTERS/Staff/Remote