World shares hit five-month high

Wednesday, 5 August 2020 01:12 - - {{hitsCtrl.values.hits}}

LONDON (Reuters): European shares were mixed on Tuesday after company earnings reports, and the dollar’s rebound stalled as investors waited for talks about government aid in the United States to make progress. Strong US manufacturing data boosted sentiment through the Asian session, even as Sino-US relations took a turn for the worst.

After a rally on Monday, European shares opened higher but quickly slipped into the red, with the pan-European STOXX 600 down 0.3% and London’s FTSE 100 flat on the day by 1034 GMT. Disappointing earnings reports from the world’s largest spirits maker, Diageo PLC, and German drugs and pesticides group Bayer took the shine off growth-linked cyclical stocks.

Shares in BP jumped after it cut its dividend and posted a record loss that was in line with expectations. The MSCI world equity index, which tracks shares in 49 countries, was up 0.4% after reaching a five-month high just after 0700 GMT. MSCI’s main European Index was up 0.1%.

The rebound in the dollar faltered, with investors still waiting for Washington to make progress in talks over the next round of fiscal stimulus. A $600-per-week enhanced unemployment benefit, which provided a lifeline for the tens of millions of Americans who lost their jobs due to the pandemic, expired on Friday.

The dollar index was flat on the day at 93.532. The euro rose 0.1% against the dollar, to $1.17720.

Ten-year German bond yields edged down to -0.5400, but remained above the two-month lows reached at the end of last week.

Spot gold edged down from all-time highs, at $1,974.3033 per ounce, amid mounting COVID-19 cases and a warning from the World Health Organisation that the road to normality would be long. Oil prices slipped on fears that a new wave of COVID-19 infections could curtail a pick-up in fuel demand, just as major producers ramp up output.