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NEW YORK: Global equity markets faltered yesterday as a mixed reading of US housing data took the edge off this year’s stock rally, while oil prices fell as the prospect of increased Saudi supply offset optimism spurred by an improving worldwide economy.
A measure of world shares rose above a peak set in May 2011 to trade at highs last seen 4 1/2 years ago, before paring gains. Investors were cautious with minutes from the Federal Reserve’s most recent meeting due for release later in the day. Global equity markets have surged over the last seven months as major central banks repeatedly delivered monetary support to weak economies. MSCI’s all-country world equity index hit a session high of 359.37 before paring gains to trade at 358.21, 0.04 percent higher on the day.
Wall Street was mostly lower and the FTSEurofirst 300 index index of top European shares was down 0.15 percent at 1169.96. The benchmark S&P 500 has gained more than 7 percent so far this year, giving some investors pause.
US residential construction fell in January but a jump in permits for future home building to a 4-1/2 year high offered hope the housing market recovery remains on track. The Dow Jones industrial average was up 7.22 points, or 0.05 percent, at 14,042.89. The Standard & Poor’s 500 Index was down 3.25 points, or 0.21 percent, at 1,527.69. The Nasdaq Composite Index was down 5.98 points, or 0.19 percent, at 3,207.62.
The Dow edged higher on gains by Boeing Co, which has found a way to fix battery problems on its grounded 787 Dreamliner jets, a source familiar with the US company’s plans said. Boeing shares rose 1.8 percent to 76.01.
Saudi Arabia, the world’s top exporter of crude oil, expects to raise its output in the second quarter to satisfy higher demand from China and drive economic recovery elsewhere, oil industry sources said, but the exact rise in volume was unclear.
April Brent crude futures were 66 cents down at $116.86 a barrel after posting their first gain in four sessions on Tuesday. US crude fell 81 cents to $95.85.
US Treasury debt prices eased, tracking falls in German bonds after a weak auction, although the market was seen range-bound before the release of minutes of the Federal Reserve’s January policy meeting later in the day. The benchmark 10-year US Treasury note was down 1/32 in price to yield 2.0295 percent.
European stock markets diverged yesterday, with London gaining on an increasing prospect of more cash stimulus from the Bank of England, while Paris dropped on profit-taking, analysts said. At closing, London’s FTSE 100 index of leading companies gained 0.26 percent to 6,395.37 points while Frankfurt’s DAX 30 dipped by 0.30 percent to 7,728.90 points and in Paris the CAC 40 fell 0.69 percent to 3,709.88 points
“The apparent shift towards more easing by the UK central bank was sufficient to lift the FTSE 100 over the 6,400 mark, revisiting this level for the first time since January 2008,” said Chris Beauchamp, an analyst at IG trading group. Asian markets mostly climbed yesterday, with dealers taking a positive cue from Wall Street and Europe, following a surge in investor confidence in eurozone powerhouse Germany.
Japanese shares posted healthy gains as the yen softened and data showed exports rose for the first time in eight months in January, although the country still posted its worst ever monthly trade deficit.reuters