WORLDWIDE: HEADLINES
World stock prices gain on strong U.S. holiday sales
Global stock markets rose on Monday and oil prices eased as investors hailed strong U.S. holiday season sales and some grew less fearful about economic damage from the Omicron variant of COVID-19.
Still, fears that the pandemic could hurt economic growth pushed gold prices to the highest in more than a week despite pressure from a firmer U.S. dollar.
A Mastercard Inc survey showed a substantial rise in U.S. holiday season retail sales. This fueled investor optimism, boosting Wall Street and lifting a gauge of stocks across the globe (.MIWD00000PUS) by 0.87%. European gains offset earlier weakness across Asian markets.
Some investors grew confident a global recovery would regain steam next year even though the pandemic has prompted U.S. airlines to cancel or delay thousands of flights due to staff shortages, while several cruise ships had to cancel stops after COVID-19 outbreaks aboard.
In Asia, China reported its highest daily rise in local COVID-19 cases in 21 months as infections more than doubled in the northwestern city of Xian, its latest hotspot.
In France, the government convened a special meeting that could trigger new restrictions after the country hit another infection record.
Spot gold added 0.1% to $1,811.92 an ounce.
Wall Street’s main stock indexes notched their fourth straight session of gains, after reports last week that the highly infectious Omicron variant may not be as deadly as earlier types of COVID-19.
Full coverage: REUTERS
S&P, IHS to offload units ahead of merger to meet antitrust conditions
S&P Global (SPGI.N) and IHS Markit (INFO.N) said on Monday they would sell a couple of businesses to satisfy antitrust requirements attached to the $44 billion merger of the financial information providers.
S&P Global will sell securities data solutions provider CUSIP Global Services (CGS) to financial data services firm FactSet (FDS.N) for $1.93 billion in cash, while IHS will offload its Base Chemicals business to News Corp (NWSA.O) for $295 million.
The divestments come a month after the pair won U.S. antitrust approval for their planned merger, provided they sell certain businesses and scrap a non-compete agreement with a retail gasoline deals data provider.
While Base Chemicals provides price data and analysis on key industrial chemicals, CGS provides identifiers for financial instruments across exchanges around the world.
IHS and S&P Global said on Monday they expect their combined company to receive net sale proceeds of about $1.3 billion from these deals, which remain subject to further review and approval by antitrust regulators.
S&P Global also said it has pledged to sell its Leveraged Commentary and Data business, along with a related family of leveraged loan indices as a condition for regulatory approval.
Full coverage: REUTERS
WORLDWIDE: FINANCE/MARKETS
Asian shares rise, yen falls as traders shrug off Omicron fears
Asian shares gained on Tuesday, cruising in the slipstream of another record-setting day on Wall Street amid strong retail figures, while the safe-haven yen lost ground as traders stayed in riskier currencies and asset classes like equities.
A variety of asset classes from oil to Japan’s Nikkei Stock Average are now trading at around one-month highs, having walked back losses from late November when the Omicron variant of COVID-19 first emerged and sent investors scurrying for safe havens.
As the worst fears of the impact of the new variant have subsided, investors have been returning to risk assets.
On Tuesday, Japan’s Nikkei (.N225) gained 1.1%, and touched its highest since Nov. 26, while MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) gained 0.23%. Recent losses by index heavyweights like Alibaba (9988.HK) and Tencent (0700.HK) mean the broad benchmark is still well off its late November levels.
“The risk-on sentiment continues,” said Edison Pun, senior market analyst at Saxo Markets in Hong Kong, who said neither Omicron nor China’s coronavirus situation was troubling investors.
China reported 209 new confirmed coronavirus cases for Dec. 27, up from 200 a day earlier, mostly in the northwestern province of Shaanxi, where Xian, the provincial capital, is in lockdown.
Elsewhere, authorities in Britain and France have held off from imposing tough restrictions on movement, betting that high vaccination rates will stop hospitals from being overwhelmed even as cases surge.
Full coverage: REUTERS
Safe-haven yen sinks to one-month low as Omicron worries ebb
The yen traded near a one-month low to the dollar on Tuesday as safe-havens fell out of favor following Wall Street’s rally to a record high overnight, with Omicron uncertainty consigned to the background.
The Japanese currency weakened as far as 114.935 yen per dollar for the first time since Nov. 26, approaching the year-to-date low of 115.525 reached Nov. 24.
The S&P 500 (.SPX) ended at a record high on Monday after strong U.S. retail sales data eased worries from the highly infectious Omicron coronavirus variant, which has forced thousands of flight cancellations and delays over the holidays and stranded cruise ships.
The U.S. dollar, also viewed as a safe-haven, continued to languish toward the bottom end of its recent trading range versus a basket of peers, even after a hawkish tilt at the Federal Reserve that had policymakers signaling three quarter-point interest rate increases next year.
The dollar index, which measures the currency against six major rivals, was little changed from the previous session at 96.076.
“Markets globally are optimistic” that Omicron won’t derail an economic recovery, denting demand for haven currencies, predominantly the yen, said Osamu Takashima, head of G10 FX strategy at Citigroup Global Markets Japan.
The U.S. equities rally “implies that currently investor risk appetite must be very, very strong” despite expectations for faster Fed tightening, he said.
The yen is likely to test its 2021 low in the near term, he predicted.
Full coverage: REUTERS
Oil near one-month high on easing concerns over Omicron
Oil gained more ground on Tuesday with prices trading close to last session’s one-month high on expectations that the Omicron coronavirus variant will have only a limited impact on global demand.
Brent crude rose 7 cents, or 0.1%, to $78.67 a barrel, by 0115 GMT. U.S. West Texas Intermediate (WTI) crude rose 18 cents, or 0.2%, to $75.75 a barrel, gaining for a fifth straight session.
Both markets were trading close to Monday’s peaks, their highest prices since late November.
England will not get any new COVID-19 restrictions before the end of 2021, British health minister Sajid Javid said on Monday, as the government awaits more evidence on whether the health service can cope with high infection rates.
However, more than 1,300 flights were canceled by U.S. airlines on Sunday as COVID-19 reduced the number of available crews while several cruise ships had to cancel stops.
Investors are awaiting an OPEC+ meeting on Jan. 4, at which the alliance will decide whether to go ahead with a planned 400,000 barrels-per-day production increase in February.
At its last meeting, OPEC+ stuck to its plans to boost output for January despite Omicron.
Full coverage: REUTERS
