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GLOBAL MARKETS-Shares at 6-year high, gold bounces back
April 2, 2014 / 5:50 PM / in 4 years

GLOBAL MARKETS-Shares at 6-year high, gold bounces back

* Emerging market stock index turns positive for 2014

* Dollar reaches 10-week peak vs yen, nears 104

* ECB under pressure to ease, but traders doubt Thursday move

* Copper pares most gains after jump following Chile quake (Updates prices, adds comment)

By Rodrigo Campos

NEW YORK, April 2 (Reuters) - A global stock index edged up to a six-year high on Wednesday as U.S. data suggested the economy is improving, while the price of spot gold jumped 1 percent.

The safe-haven yen touched a 10-week low against the U.S. dollar, and Brent crude futures hit a five-month low.

New orders for U.S. factory goods rebounded more than expected in February, with shipments posting their biggest gain in seven months in a sign the economy was regaining momentum. Separate private-sector data showed U.S. companies picked up the pace of hiring in March, with 191,000 jobs created.

The data was enough to lift the S&P 500 to an intraday record high after closing at a record on Tuesday.

“Equities are still an under-owned asset class,” said Phil Camporeale, client portfolio manager at J.P. Morgan Asset Management in New York.

“We still think there’s a long way to go in terms of flows and we do have a better fundamental story this year,” he said, pointing at car sales and still historically low mortgage rates as reasons to bet on U.S. economic growth.

The private-sector jobs data is generally looked at for signs on the government’s more comprehensive monthly labor market report. The U.S. Labor Department’s report for March is due out on Friday.

The Dow Jones industrial average rose 15.99 points or 0.1 percent, to 16,548.6, the S&P 500 gained 3.48 points, or 0.18 percent, to 1,889, and the Nasdaq Composite added 3.475 points, or 0.08 percent, to 4,271.514.

The pan-European FTSEurofirst 300 index closed up 0.2 percent, extending its winning streak to a seventh straight session.

Expectations that the European Central Bank may introduce new stimulus measures soon also supported equities, although some traders said they did not expect any new action from the ECB at its policy meeting on Thursday.

“European equities are set to give good returns this year. Flows have turned positive, GDP should grow by at least 1 percent and corporate profits by around 10 percent,” said Philip Dicken, head of European equities at Threadneedle Investments.

“A weaker euro, which is a likely result of looser European monetary policy, will boost profits further,” he added

MSCI’s global equity index ticked up 0.2 percent to hit its highest level since December 2007. An index of emerging market stocks rose for a ninth straight session and turned positive for the year after being down as much as 9 percent in February.


Among commodities, Brent crude fell 1 percent to $104.62 a barrel after declining more than 2 percent on Tuesday. U.S. crude eased 0.4 percent to $99.36 a barrel after also falling around 2 percent on Tuesday on expectations domestic inventories would grow.

“Oil prices are going to come down but not because of the global economy but because we’re finding more ways of getting it out of the ground,” said Karyn Cavanaugh, senior market strategist at ING U.S. Investment Management in New York.

Copper prices hit a three-week high at $6,734 a tonne after a powerful earthquake off the coast of Chile, the world’s biggest copper producer, triggered a tsunami alert and raised concerns about supply.

The metal cut gains, however, as most mines are designed to withstand tremors and was trading up 0.2 percent at $6,675, below a high hit Monday.

Spot gold rose 0.9 percent to $1,290.14 an ounce a day after hitting its lowest since Feb. 11 at $1,277.29.

U.S. Treasuries yields edged higher after the job market data supported expectations of a strong nonfarm payrolls report on Friday.

The benchmark 10-year U.S. Treasury note eased 11/32 in price to yield 2.799 percent, compared to a yield of 2.76 percent late Tuesday. The 30-year Treasury bond price fell 24/32 to yield 3.6455 percent.

The euro dipped against the dollar ahead of Thursday’s ECB meeting. Euro zone inflation slid to just 0.5 percent this month, leading some to speculate the ECB will soon loosen policy.

Messages from policymakers have been mixed, though. On Tuesday, ECB Vice President Vitor Constancio told a news conference that low inflation was a concern but denied deflation was a threat. That was taken to mean a move by the bank on Thursday was unlikely.

A Reuters poll of 22 euro money-market traders found 18 expected no change in the ECB’s 0.25 percent refinancing rate this week.

The euro zone single currency was recently down 0.2 percent at $1.3766.

Against the yen, the greenback came close to 104 and was trading at its highest since Jan. 24. (Reporting by Rodrigo Campos; additional reporting by Sam Forgione; Editing by Meredith Mazzilli and Leslie Adler)

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