Stocks, dollar gain as payrolls fuel risk-on trades


  • Markets
  • Monday, 08 Aug 2016

Pump jacks are seen at the Lukoil-owned Imilorskoye oil field, as the sun sets, outside the west Siberian city of Kogalym, Russia, in this January 25, 2016 file photo. REUTERS

LONDON: Stock markets rose on Monday and the dollar extended gains as risk appetite revived following strong U.S. job figures that bolstered expectations of faster growth in the world's biggest economy.

The MSCI All-Country World index rose 0.4 percent, as did the pan-European STOXX 600 index, supported by a broad equity rally on Friday's payrolls data and as Europe's under-pressure banks extended gains from post stress-test lows.

The dollar edged up against a basket of six major currencies , while euro zone bond yields climbed as the U.S. numbers also drove a sell-off in fixed income markets.

Yukio Ishizuki, currency strategist at Daiwa Securities, said the robust signals from the U.S. economy were driving investors away from safe-haven assets such as the yen.

"The payrolls data puts markets on risk-on mode, making it difficult to buy the yen for now," said Ishizuki.

Gold prices also slipped, hitting a one-week low.

With stocks back in fashion, Andreas Clenow, chief investment officer at ACIES Asset Management in Zurich, said U.S. equity markets were the preferred choice for many.

"The U.S. markets look pretty healthy. We keeping making record highs in the U.S, but the European stock markets look much more sluggish," he said.

The MSCI Emerging Market index advanced 1 percent.

Oil prices rose, lifted by reports of renewed talks among some OPEC state to rein in output, a proposal that non-OPEC producer Russia was quick to dismiss.

Meanwhile, Hong Kong stocks advanced to eight-month highs on Monday, tracking gains in Asian markets, as strong U.S. jobs data on Friday lifted investors' risk appetite globally.

Both the Hang Seng index and the China Enterprises Index gained 1.6 percent to 22,494.76 and 9,276.56 points, respectively.

The Hang Seng closed at its highest level since Nov. 25, 2015.  - Reuters

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