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Global stocks rise despite G7 clash; Italy helps euro

Reuters  |  LONDON 

By Saikat Chatterjee

(Reuters) - European stocks edged higher on Monday, shrugging off the weekend's fractious meeting as investors looked forward to an event-packed week while receding tensions in nudged the towards a recent three-week high.

Donald Trump's rejection of a previously signed communique separates the from its traditional global economic allies and underlines trade tensions, though markets have taken the as yet another theatrical gesture by the

If anything, markets believe the summit might force policymakers to adopt a cautious stance as two of the world's top central banks - the and the - are set to tighten policy this week.

"Though the latest headlines are definitely not positive for global trade, risk appetite is broadly firm across the board as investors are of the view it might force the ECB and the Fed to take a cautious approach," said Neil Mellor, a senior strategist at in

While stocks wobbled and the dollar edged higher in initial reaction to the G7, which termed as a "mess", markets quickly recouped losses, with stocks firmer across the board on expectations that any withdrawal in policy stimulus would be very gradual on the backdrop of rising trade tensions.

An MSCI index of European stocks was up 0.7 percent in early trading, not far from a recent two-week high.

The futures were 0.1 percent lower after dropping as much as 0.3 percent in early trading, indicating a firm start for Wall Street.

MSCI's broadest index of shares outside slipped early but was last up 0.3 percent. Hong Kong's Hang Seng also gained 0.3 percent while the Shanghai Composite Index fell 0.5 percent.

The Fed is almost certain to raise rates again on Wednesday, inching closer to a neutral policy stance, while the ECB is likely to signal on Thursday that its 2.55 trillion bond purchase scheme will end this year, a key move in dismantling crisis-era stimulus.

CONCERNS RECEDE

Also helping risk appetite in early Monday trading qwew comments from Italy's new coalition government saying it had no intention of leaving the zone and planned to cut debt levels.

In his first interview since taking office a week ago, Minister told the newspaper on Sunday that the coalition was committed to remaining within the single and wanted to boost growth through investment and structural reforms.

Bond yields tumbled by 25-50 basis points across the board in while the euro firmed, nearing a recent three-week high. The single was up 0.4 percent at $1.1809 in early trading.

The dollar index against a basket of six major currencies was 0.1 percent lower at 93.470.

slipped on rising Russian production and increasing U.S. drilling activity.

Brent crude futures fell 0.33 percent to $76.21 a barrel and U.S. crude futures slipped 0.3 percent to $65.54 a barrel.

(Reporting by Saikat Chatterjee; Additional reporting by in TOKYO; Editing by Robin Pomeroy)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, June 11 2018. 14:20 IST
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