Oil at near nine-month high while indices stay flat

New York — Global equity benchmarks struggled for direction while oil prices rallied near nine-month highs on Friday, as investors weighed hopes for a US coronavirus relief package against moves by the US government to add dozens of Chinese companies to a trade blacklist.

The Democratic-controlled House of Representatives continues to negotiate with the Republican-led Senate on a $900bn piece of legislation to support the economy during a pandemic that has killed nearly 309,000 Americans.

“It does feel like we have a particularly light schedule in terms of events with markets in the US going to be focused on the ongoing negotiations to see if we can get things over the line,” said Ned Rumpeltin, European head of currency strategy at TD Securities.

Asian shares fell earlier in the day after Reuters reported that the US was set to add dozens of Chinese companies, including the country’s top chipmaker SMIC, to a trade blacklist later in the day.

MSCI’s gauge of stocks across the globe shed 0.09% following broad declines in Asia and flat trading in Europe.

In morning trading on Wall Street, the Dow Jones Industrial Average fell 5.97 points, or 0.02%, to 30,297.4, the S&P 500 lost 2.08 points, or 0.06%, to 3,720.4 and the Nasdaq Composite added 12.50 points, or 0.1%, to 12,777.24.

In currency markets, the pound slipped off the two-and-a-half year high it hit on Thursday, with less than two weeks remaining before the UK leaves the EU single market on December 31.

The EU warned there were just hours left to strike a deal, undermining British domestically focused mid-caps as the prospect of trade tariffs in the New Year loomed.

“The EU-UK talks could well go right up to the wire as neither side wants to be seen to be giving in too easily. It’s all about the optics for both sides, so it could take a little bit longer than most people are comfortable with,” said Michael Hewson, chief market analyst at CMC Markets.

The dollar index rose 0.158%, with the euro down 0.18% to $1.2244.

Benchmark 10-year notes rose 2/32 in price to yield 0.9246%, from 0.93% late on Thursday.

Markets were encouraged that the US stood ready to ship 5.9-million doses of a new coronavirus vaccine developed by Moderna.

Hopes for additional distribution of coronavirus vaccines helped push oil prices near nine-month highs. US crude rose 0.95% to $48.82 per barrel and Brent was at $51.81, up 0.6% on the day.

Reuters

Source: businesslive.co.za