Oil, gloabal stocks pick up from lows, eye EU meeting

LONDON Fri Jun 22, 2012 5:18pm IST

Traders speak to one another below to electronic boards at the Madrid stock exchange June 19, 2012. REUTERS/Andrea Comas

Traders speak to one another below to electronic boards at the Madrid stock exchange June 19, 2012.

Credit: Reuters/Andrea Comas

Related Topics

Stocks

   

LONDON (Reuters) - Oil bounced from 18-month lows and U.S. stock index futures pointed to a higher open on Friday as investors looked to possible crisis resolution at upcoming meetings of European leaders rather than at weak data.

European stocks were down 0.4 percent after German business sentiment fell for a second straight month in June to its lowest level in more than two years, according to the Ifo think tank, adding to poor economic numbers this week from the United States, China and Europe.

But investors were looking to avoid hefty sales before a meeting of leaders of Germany, France, Italy and Spain in Rome later on Friday and a full EU summit next week.

U.S. stock index futures rose 0.4-0.5 percent, recovering after U.S. stock markets lost 2 percent on Thursday on anaemic U.S. factory growth in June.

Brent crude briefly traded at its lowest in 18 months before rebounding above $90 a barrel.

"It has been a long fall, driven by global economic slowdown and oil fundamentals such as weaker demand from China," said Tony Machacek, oil futures broker at Jefferies Bache.

"Technical indicators show the market is a little bit oversold, so there could be some short-covering around."

Brent has fallen more than 8 percent this week, and is heading for its biggest weekly drop in a year.

Ratings agency Moody's issued a long-expected downgrade to the credit ratings of 15 of the world's biggest banks late on Thursday.

But Morgan Stanley (MS.N), one of the most closely watched firms in the review, had its long-term debt rating lowered by just two notches, one level less than had been expected, sending its stock up sharply in after-hours trading.

Bund futures fell 33 ticks, reversing earlier gains before the Rome meeting.

The European leaders will search for ways to achieve fiscal and banking union in the euro zone and, more urgently, the meeting may also be the occasion for Spain to formally request assistance of up to 100 billion euros for its struggling banks.

Spanish stocks rose 1.34 percent after independent audits presented on Thursday showed Spain's banks will need up to 62 billion euros in capital needs under stressed economic conditions, well below the 100 billion euro bailout ceiling.

Spanish and Italian 10-year bond yields rose but are not as high as earlier this week, when Spanish yields climbed above the 7 percent level considered unsustainable.

The dollar steadied after hitting its highest in over a week against the euro and a basket of major currencies and a five-week high against the yen, benefiting earlier in the day from safe-haven flows and concern about further easing by the Bank of Japan. (Additional reporting by Luke Pachymuthu; editing by Elizabeth Piper)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Coal Block Allocation

Coal Block Allocation

Government urges Supreme Court to not cancel some 'illegal' coal mines  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit  Full Article 

Basel III Norms

Basel III Norms

RBI amends Basel III guidelines for banks  Full Article 

HSBC PMI

HSBC PMI

Factory activity expands at slower clip in August.  Full Article 

Current Account

Current Account

Balance of payments surplus for third straight quarter  Full Article 

India Infrastructure

India Infrastructure

RBI rule handicaps India's infrastructure hopes  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past  Full Article 

China Economy

China Economy

Retreat in China's PMIs heightens calls for policy easing.  Full Article 

Managing Share Sales

Managing Share Sales

Govt seeks bids from banks to manage PFC, REC share sales   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage