Commodity Rally Gives Stocks a Boost

04/19/18 03:47 AM EDT
By Joanne Chiu and Riva Gold 
   -- European stocks flat 
 
   -- Hang Seng climbs 
 
   -- Crude oil rally continues 

Stocks in Europe and Asia mostly inched higher Thursday as a rally in commodity prices boosted shares of energy and materials companies.

The Stoxx Europe 600 edged up 0.1% in the early minutes of trading, following modest gains in Japan, Hong Kong and Australian benchmarks.

Oil and mining companies led gains, with Brent crude oil last up 0.5% at $74.87 a barrel after settling Wednesday at its highest since November 2014. Government data showed U.S. stockpiles fell by more than analysts were expecting, the latest sign a global glut in crude is abating.

Copper futures were last up 0.3% at $7,053 a metric ton, while LME nickel futures were up 6.4% at $16,285 a metric ton and aluminum futures rose 2.8% to $2,622.50 a ton. That helped Europe's basic resources sector inch up 0.6% on Thursday.

Some investors also expect strong first-quarter results to continue to help lift stocks after a rocky start to the second quarter, marked by worries about trade and U.S.-led strikes in Syria.

"With the recent jitteriness of markets ... the earnings season should remind people that companies are still growing," said Caroline Simmons, deputy head of the U.K. investment office at UBS Wealth Management. "We're still quite positive on markets," she said.

In Europe on Thursday, shares of Publicis Groupe rose 4.4% after the advertising agency reported solid growth from its North American business, while Swiss conglomerate ABB rose 4.3% after reporting a drop in net profit but slightly higher revenue.

A post-earnings decline in shares of Novartis and Unilever weighed on the broader index, however, keeping gains in check.

Earlier, Asia-Pacific stocks mostly rose Wednesday, supported by gains in energy companies and Chinese markets.

Hong Kong's China Enterprises Index, made up of Chinese-based firms with listings in Hong Kong, climbed 1.5%, while the benchmark Hang Seng Index rose 1%. Oil-related stocks helped fuel gains, as PetroChina jumped 5.3% and peer Cnooc gained 3.5%.

Australian energy stocks rose a further 0.7%, putting the month's advance at 8.2%, on pace for the biggest monthly gain since 2011.

The Shanghai Composite Index rose 0.8% while Japan's Nikkei Stock Average edged up 0.2%.

Signs of easing geopolitical tensions have also helped smooth markets recently.

"The trade risk between the U.S. and China can be reduced because ultimately China can use North Korea as a bargaining chip," said James Cheo, senior investment strategist at Bank of Singapore.

But Vincent Wen, an investment manager at KCG Securities Asia, noted that fears about trade tensions and other geopolitical risks could re-emerge at any time. The weak March trade data from China should also keep investors alert, he added.

Write to Joanne Chiu at joanne.chiu@wsj.com and Riva Gold at riva.gold@wsj.com

 

(END) Dow Jones Newswires

April 19, 2018 03:47 ET (07:47 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.