World stocks above 4-week low; euro falls
World stocks ticked higher from this week's 4-week low on Thursday, underpinned by strong appetite for commodity trader Glencore's
Glencore priced its record-breaking offering of up to $11 billion in the middle of its initial range, with shares in the grey market opening more than 3 percent above the offer price of 530 pence.
This underscored strong appetite for the shares, helping other commodity stocks.
Markets had a bounce yesterday and momentum will continue this morning, with bargain hunting coming in... Names that have sold off are starting to look interesting again, said Matt Brown, trader at Catalyst Markets.
If we see a successful Glencore IPO it may bring some appetite back for some unloved commodity stocks. The MSCI world equity index and the Thomson Reuters global stock index were just up on the day.
The FTSEurofirst 300 index <.FTEU3> rose half a percent. The STOXX Europe 600 Oil & Gas index <.SXEP> and STOXX Europe 600 Basic Resources index <.SXPP> both rose 1 percent to become the day's top performers.
Emerging stocks <.MSCIEF> were down 0.1 percent.
U.S. crude oil fell a quarter percent to $99.87 a barrel.
COLLATERAL UNCERTAINTY
The euro was hurt by warnings that the European central bank would be unable to accept Greece's government bonds as collateral -- potentially crippling Greek bonds -- in the event of a restructuring of its debt.
Against the dollar it eased 0.2 percent to $1.4225, erasing earlier gains.
Bund futures fell 24 ticks.
European finance ministers broke a taboo this week by acknowledging for the first time that some form of restructuring might be required to ease Greece's debt burden, which at 150 percent of annual output is among the highest in the world.
German daily Financial Times Deutschland reported European Central Bank President Jean-Claude Trichet had warned the bank would stop accepting Greek bonds as collateral if Greece asked investors for a voluntary extension of bond maturities.
Another ECB official Juergen Stark said a restructuring of Greek debt would make it impossible for the ECB to continue to accept its bonds as collateral in liquidity operations.
The dollar <.DXY> was steady against a basket of major currencies, after briefly scaling a three-week high around 81.84 yen thanks to a rebound in U.S. bond yields from 2011 lows around 3.1 percent.
Minutes from the Federal Reserve's April policy meeting, released on Wednesday, showed a few central bank officials saw a rise in inflation risks that suggested tightening of monetary policy might be necessary sooner than currently anticipated.
The Fed said in its policy statement last month that while inflation was rising, any price pressure was expected to be transitory.
(Additional reporting by Joanne Frearson; editing by Patrick Graham)
© Copyright Thomson Reuters 2024. All rights reserved.