US stocks rise while oil prices steady
US stocks rose on Tuesday as traders kept close tabs on the Covid-19 situation in China and the oil price recovered following a volatile session a day earlier.
Wall Street’s S&P 500 closed 1.4 per cent higher in New York while the tech-heavy Nasdaq Composite also gained 1.4 per cent.
US equities fell on Monday as rising cases of Covid-19 in China weighed on hopes that the world’s second-biggest economy might be about to relax its virus control measures. The country reported almost 28,000 new Covid cases on Tuesday, close to its record daily caseload.
China’s zero-Covid approach had “suddenly returned as a very central driver for global markets” and was helping to fuel “a return to the dollar”, said Francesco Pesole, FX strategist at ING.
The dollar fell 0.6 per cent against a basket of six other currencies on Tuesday, bringing its decline in November to 3.8 per cent.
“Optimism on China’s outlook was one of the two key forces, along with speculation about a dovish pivot by the [US Federal Reserve], behind the sharp dollar correction earlier this month,” Pesole added.
Minutes from the Fed’s November meeting, due to be released on Wednesday, may provide further clues on the outlook for monetary policy.
Elsewhere in equity markets, London’s FTSE 100 gained 1 per cent, boosted by gains for oil and gas majors such as BP and Shell, up 6 per cent and 7 per cent respectively. The regional Stoxx Europe 600 added 0.7 per cent.
Hong Kong’s Hang Seng index fell 1.3 per cent while China’s CSI 300 finished flat. Japan’s Topix rose 1.1 per cent and South Korea’s Kospi shed 0.6 per cent.
Oil prices were higher on Tuesday after the cartel of major exporters and their allies reiterated plans to stick to targets to cut production, rather than increase output to make up for any shortfall from Russian supplies.
International benchmark Brent crude settled 0.9 per cent higher to trade at $88.36 a barrel. West Texas Intermediate, the US marker, rose 1.3 per cent to $81 a barrel.
The market had a volatile session on Monday after the Opec group of oil-producing countries denied a report by The Wall Street Journal that the cartel might increase supply by up to 500,000 barrels a day. The price of both benchmarks fell as much as 6 per cent, reaching their lowest levels on an intraday basis since January, before moderating and closing fractionally lower.