Musk threatens Apple with legal action over App Store bias towards OpenAI
(Adds U.S. market open, byline, dateline; previous LONDON)
* Stocks surge after worst day since October
* Gold prices fall, yen weakens as safe-haven appeal slips
* Safe-haven demand strong after risk assets sell off
* Oil prices rise after five-day decline
By Herbert Lash
NEW YORK, Jan 28 (Reuters) - Global equity markets rebounded
in a broad rally on Tuesday and some safe-haven assets lost a
bit of their appeal as investors took a less pessimistic view of
the potential economic fallout from China's coronavirus
outbreak.
Gold fell and the Japanese yen eased against the dollar, but
risk aversion in currency markets persisted, with the Australian
dollar AUD= leading losers and the greenback strengthening to
an eight-week high against a basket of six rivals .DXY .
Gains in technology and financial shares led Wall Street to
recoup some losses from the worst selloff in about four months
on Monday that was sparked by the coronavirus outbreak and
worries over its near-term impact on growth.
Major European and U.S. stock indexes rebounded around 1% as
President Xi Jinping said China was sure of defeating a "devil"
coronavirus that has killed 106 people. Chinese markets will remain closed until next week, but a
0.5% overnight drop in Tokyo's Nikkei was more modest than
Monday's thumping. Other Asian markets that were open rallied.
"History shows us as we look back at several different
examples that these viral outbreaks tend to be short lived,"
said Candice Bangsund, a global asset allocation portfolio
manager at Fiera Capital in Montreal.
While markets are likely to gyrate in the short term, the
global economy will resume the improving growth it started to
exhibit late last year, Bangsund said.
"The economy could be ripe for a sharp snapback or a
V-shaped recovery once we find out when this is contained and
when the outbreak is indeed brought under control," she said. We
maintain the global economy will come back to life."
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.61%, while its emerging market index lost 0.25%.
Shares on Wall Street also surged. The Dow Jones Industrial
Average .DJI rose 214.84 points, or 0.75%, to 28,750.64. The
S&P 500 .SPX gained 33.77 points, or 1.04%, to 3,277.4 and the
Nasdaq Composite .IXIC added 122.92 points, or 1.34%, to
9,262.23.
Oil futures edged up after falling for five days following
the recovery in equities and talk that Organization of the
Petroleum Exporting Countries and its allies might tighten the
market amid fears the coronavirus could weigh on oil demand.
Brent LCOc1 futures rose 46 cents to $59.78 a barrel,
while U.S. West Texas Intermediate (WTI) crude CLc1 added 55
cents to $53.69. O/R
The yield on the benchmark 10-year U.S. Treasury note
bounced off three-month lows after a key part of the yield curve
briefly inverted for the first time since October.
The yield US10YT=RR fell as low as 1.57% overnight, the
lowest since Oct. 10, before the 10-year note fell 13/32 in
price to yield 1.6476%.
An inverted curve, when longer-dated yields fall below
shorter-maturity ones, has been a fairly reliable signal that a
U.S. recession will follow one to two years later.
Euro zone government bond yields bounced off three-month
lows to rise for the first time in over a week after U.S.
consumer confidence exceeded expectations to hit its highest
level since August Traders awaited the outcome of a two-day meeting of Federal
Reserve policymakers, which started on Tuesday. The market
consensus is that the central bank will keep interest rates
unchanged at between 1.5% and 1.75%.
The dollar index .DXY rose 0.12%, with the euro EUR=
down 0.06% to $1.1009. The yen JPY= weakened 0.24% versus the
greenback at 109.16 per dollar.
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
World stocks lose $834 billion in market value https://tmsnrt.rs/2O6MWZx
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