Global shares rise, buoyed by Wall Street rally from bonds and lower oil prices




Stock trader Thomas Lee works at the New York Stock Exchange, Friday, March 13, 2020. Stocks are opening sharply higher on Wall Street a day after the worst drop since 1987. (AP Photo/Mark Lennihan)
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TOKYO (AP) — Global shares advanced Thursday after a plunge in oil prices aided a recovery on Wall Street.

France’s CAC 40 lost 0.3% to 6,976.60. Germany’s DAX shed 0.2% to 15,222.00, and Britain’s FTSE 100 was unchanged at 7,414.46. The futures for the S&P 500 and Dow industrials were 0.3% lower.

Market sentiment was helped by a $5 decline in oil prices on Wednesday. Prices recovered slightly in Asian trading, but were down nearly $1 in early European trading. Lower energy costs would relieve inflationary pressures that have led central banks to keep interest rates high.

Japan’s benchmark Nikkei 225 jumped 1.8% to finish at 31,075.36. Sydney’s S&P/ASX 200 gained 0.5% to 6,925.50, while South Korea’s Kospi was little changed, inching down less than 0.1% to 2,403.60. The Hang Seng index in Hong Kong gained 0.1% to 17,213.87.

Benchmark U.S. crude oil dropped 90 cents to $83.32 a barrel in electronic trading on the New York Mercantile Exchange. It fell $5.01 to settle at $84.22 per barrel on Wednesday in its biggest drop in just over a year. It was hovering near $70 a barrel during the summer and has been been pulling back since topping $93 last week.

Brent crude, the international standard, gave up 83 cents to $84.98 per barrel.

“Oil prices rebounded during Asian trading on Thursday morning after experiencing their most significant daily decline in a year. However, the main story remains demand destruction, as gasoline stocks have seen a significant build-up,” Stephen Innes, managing partner at SPI Asset Management, said in a commentary.

Crude prices fell after the Energy Information Administration reported a 4.6 million barrel increase in commercial petroleum products. Inventories of gasoline rose to above average.

The S&P 500 climbed 0.8% on Wednesday, clawing back a big share of a tumble the day before. The Dow Jones Industrial Average rose 0.4%, a day after erasing the last of its gains for the year so far. The Nasdaq composite gained 1.4%.

Stocks have struggled since the summer under the weight of soaring Treasury yields in the bond market. High yields undercut stock prices by pulling investment dollars away from stocks and into bonds. They also crimp corporate profits by making borrowing more expensive.

The yield on the 10-year Treasury, which is the centerpiece of the bond market, pulled back from its highest level since 2007, down to 4.74% early Thursday from 4.80% late Tuesday. Shorter- and longer-term yields also eased to allow more oxygen for the stock market.

After already hiking its main interest rate to the highest level since 2001, the Fed has indicated it may keep its overnight rate higher next year than it had earlier expected. Treasury yields have correspondingly snapped higher as traders accept a new normal for markets of high rates for longer.

Wall Street is also absorbing the ouster of Kevin McCarthy as the speaker of the House of Representatives. The unprecedented move likely doesn’t change much in the short term, with funding for the U.S. government set until Nov. 17.

A shutdown would drag on the U.S. economy, raising the risk of a recession, though financial markets have held up relatively well through past shutdowns.

In currency trading, the U.S. dollar fell to 148.95 Japanese yen from 149.02 yen. The euro cost $1.0514, up from $1.0504.