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Markets Buoy on OPEC Outcome
Markets outside of the US rallied following news that OPEC agreed to cut output for the first time in eight years.
US stocks lower on healthcare in volatile trading
US stocks dragged lower in choppy trading late Thursday morning after two straight days of gains, pulled lower by Apple and healthcare stocks. At the time of writing the S&P 500 had dropped -0.5%, whilst the Dow Jones Industrial Average had slid -1.0%. Crude oil advanced +1.6%, a day after OPEC members agreed to curb production, even as analysts raised questions about the effectiveness of the deal.
The S&P Healthcare Index dropped -1.0% as shares of Merck (-2.5%) and Johnson & Johnson (-1.6%) took losses. Apple fell -1.2% following a recommendation downgrade. The stock was the biggest drag on Wall Street. Accenture (+4.7%) gave the biggest boost to the S&P, after the company reported better than expected quarterly revenue and profit. Energy companies tracked oil higher, as Devon Energy and ConocoPhillips rallied +4.5% and +3.9% respectively.
European and UK stocks advance following OPEC agreement
European equities parred advances as a rally in energy producers was not enough for European equities to maintain their gains after US data stoked concern about the economy as the Federal Reserve contemplates raising interest rates. The Stoxx Europe 600 rose less than +0.1%, almost completely erasing its advance in the last hour of trading. Total rose +4.2% with oil. Novo Nordisk lost -3.5% after saying it will trim roughly 2% of its workforce.
The UK’s FTSE 100 jumped +1.0%, buoyed by energy companies after a surprise OPEC agreement stoked confidence for an earnings recovery. Royal Dutch Shell and BP rose +6.6% and +4.5% respectively, sending a gauge of oil and gas stocks to their biggest advance since February. The OPEC agreement yesterday surprised traders who had expected members to maintain output, spurring a rally in crude prices. Commodity producers also climbed, with BHP Billiton gaining +6.5%.
Asian and Japanese markets up on oil
Asian stocks rose after an agreement by OPEC to cut production pushed up a regional gauge of energy shares by the most since March. The MSCI Asia Pacific Index added +0.5%, while the Shanghai Composite Index jumped +0.4%. Sinopharm climbed +2.6%, while US listed Alibaba (-2.8%) and Baidu (-2.6%) took losses.
Japan’s Topix advanced +0.9%. Japan Petroleum Exploration added +8.8%. Inpex, the country’s largest oil-and-gas explorer, jumped +5.7%.
ASX 200 rises with energy and mining stocks
The ASX 200 rallied +1.1% as energy and mining stocks soared after an unexpected announcement from leading oil producers to cut production.
Crude, gold and iron ore advance
WTI crude gained +1.6% to US$47.81 while gold rose +0.1% to US$1,322.27. Iron ore advanced to US$56.7/MT.
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