World stocks jump as oil price steadies

30/12/2015 05:56 AST

Stocks gained around the world, trimming the first annual loss for equities since 2011, while Treasuries declined as oil led a rally among commodities.

The Standard & Poor’s 500 Index halted a two-day slide and the MSCI All-Country World Index cut its loss for the year to 3.5 per cent. European stocks rebounded in thin trading, trimming their worst December drop since 2002.

Oil gained above $37 a barrel amid forecasts for falling US stockpiles. The Australian and New Zealand dollars gained with the Norwegian krone. Treasury rates on 10-year notes rose three basis points.

“Financial markets have had a tendency this year to focus on only one thing at a time, and at the moment it’s oil,” said Teis Knuthsen, chief investment officer at Saxo Bank A/S’s private-banking unit.”There’s a lot of nervousness that’s stemming from the continued decline in oil prices.”

The global oil glut and China’s economic weakness are fanning the biggest annual drop in commodity prices in seven years, according to a Bloomberg gauge of raw materials.

That’s undermining corporate earnings and hindering central bank attempts to ignite inflation. Global equities are on track for the worst year since 2011, while the S&P 500 is flat for the year.

The Bloomberg Commodity Index is down about 25 per cent in 2015, while global bonds lost 2.4 per cent, according to a Bank of America Merrill Lynch index. Stocks The S&P 500 rose 0.9 per cent at 10 am in New York, climbing back into positive territory for the year.

Stocks are defying the historical trend of gains in the final month of the year, with the benchmark index down by 0.3 per cent, after a series of sharp rallies and selloffs.

The Stoxx Europe 600 Index added 1.1 per cent. The European benchmark is down 4.4 per cent this month amid a disappointing increase in European Central Bank stimulus, along with the commodity rout.

The index lost a big part of its annual advance amid concern over global growth, just as the Federal Reserve raised its interest rates for the first time in almost a decade.

The Gulf Today