What happens to stocks if AI loses momentum?
* MSCI world equity index up
* Central bank easing helps sentiment
* Treasury yields steady as funding pressures ease
* Oil up on day, poised for biggest weekly jump since
January
(Updates throughout with open of U.S. markets, changes
dateline; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Sept 20 (Reuters) - An index of global stock
markets edged higher on Friday as stimulus measures by major
central banks eased worries about growth, especially in Asian
markets, while oil headed for its best week since January.
China cut a key lending rate for the second straight month
on Friday, becoming the third major central bank to cut interest
rates in recent days, after the European Central Bank and the
U.S. Federal Reserve. Equity markets have largely welcomed the central bank moves,
although most of the cuts was already priced in and worries
about a possible global slowdown still linger.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 47 countries, was 0.14% higher.
U.S. stocks edged higher as the interest rate cut by China's
central bank boosted investor sentiment and signs of
co-operation on trade between the world's two largest economies
allayed concerns about a slowdown in global growth. On Thursday, the U.S. Trade Representative's office said
dozens more Chinese products would be excluded from existing
tariffs. For the week, the S&P 500 and the Nasdaq were set to end
marginally higher.
"The market does seem to be in a bit of a waiting pattern,
looking for indication for whether the economy will gain
strength or the alternative indication that we are going to slow
further," said Rick Meckler, a partner at Cherry Lane
Investments, a family investment office in New Vernon, New
Jersey.
The Dow Jones Industrial Average .DJI rose 65.77 points,
or 0.24%, to 27,160.56, the S&P 500 .SPX gained 4.93 points,
or 0.16%, to 3,011.72 and the Nasdaq Composite .IXIC added
2.08 points, or 0.03%, to 8,184.96.
The pan-European STOXX 600 index .STOXX rose 0.35%, with
defensive and retail stocks leading gains. U.S. Treasury yields were steady as the New York Federal
Reserve conducted another repo operation to ease conditions in
the short-term lending markets, and as investors continued to
evaluate whether further interest rate cuts this year are
likely. The average interest rate banks charge each other to borrow
reserves overnight on Thursday fell below the upper-end of the
Federal Reserve's target range for the first time this week, as
the Fed flooded billions in cash into the banking system to
address turmoil in money markets. Benchmark 10-year notes US10YT=RR were last up 1/32 in
price to yield 1.772%, down from 1.774% on Thursday.
In foreign exchange markets, the dollar rose against a
basket of currencies, putting it on track for its first weekly
increase in three, prompted by signs of progress on U.S.-China
trade talks and hopes that the Federal Reserve would not lower
rates aggressively. The dollar index .DXY was up 0.32%.
Oil prices were up modestly on Friday, putting them on track
for their biggest weekly jump since January, lifted by rising
Middle East tensions after a key Saudi Arabian supply hub was
knocked out by an attack last weekend. "Investors should probably assume that oil stabilizes for
now in the $60-65 per barrel range, though the risk is to the
upside," said Jefferies analyst Christopher Wood.
U.S. crude CLc1 rose 0.91% to $58.66 per barrel and Brent
LCOc1 was last at $64.75, up 0.54% on the day.
Lingering tensions in the Middle East helped support gold
prices and the yellow metal was on pace for its first weekly
rise in four. Spot gold XAU= was up 0.3% at $1,503.4946 an
ounce. Palladium XPD= , which is in short supply, hit a record
peak helped by demand driven by car producers and speculators.
Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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