Wall Street, European stocks and the FTSE 100 were mixed on Monday as oil prices rallied following a crude supply cut announcement from Saudi Arabia over the weekend.
FTSE 100 and European stocks
Across the pond, the FTSE 100 (^FTSE) rose 0.49% to 7,644.35 points, while the CAC 40 (^FCHI) in Paris fell 0.02% to 7,269.09 points. In Germany, the DAX (^GDAXI) gained, by 0.25% to 16,091.89 points.
Shares in Shell (SHEL.L) and BP (BP.L) got a lift following the Saudi production cut announcement, while takeover speculation boosted ASOS (ASC.L) stock after the Sunday Times reported that it was the subject of a £1bn ($1.24bn) approach from Turkish online retailer Trendyol, backed by Chinese e-commerce giant Alibaba.
US and Asia markets
In the US, the main indexes were flat after investors digested the debt ceiling deal and a strong report on the US jobs market last week, which suggested a recession may not be as close as Wall Street had feared. Traders will now be looking ahead to the Federal Reserve’s monetary policy decision next week.
Investors will also be keeping across Apple's latest Worldwide Developers Conference later at its headquarters in California. The iPhone maker is expected to reveal its mixed reality headset, among other upgrades across its product line.
In Asia, the key markets were all in the green overnight. Tokyo’s Nikkei 225 (^N225) rose 2.20% to 32,217.43 points, while the Hang Seng (^HSI) in Hong Kong gained 0.72% to 19,086.9. In mainland China, the Shanghai Composite (000001.SS) also climbed, by 0.09% to 3,223.09 points.
The support for the dollar follows strong US jobs data last week, while in Britain, latest business activity data highlighted the continued challenge of inflation.
In commodities, oil prices were higher after Saudi Arabia said it will reduce how much crude it sends to the global economy in a bid to prop up prices.
It said it will cut 1 million barrels per day, starting in July. Meanwhile, other OPEC+ producers agreed at the weekend to extend earlier production cuts through next year.
UK service sector firms increased their prices again last month, as they tried to pass on higher wage costs to customers
The final S&P Global/CIPS UK Services Purchasing Managers' Index (PMI) came in at 55.2, down slightly from April's one-year high of 55.9 in April. Remaining above the 50-point mark that separates growth from expansion, it shows the sector continued to expand, but at a marginally slower pace.
Service sector cost inflation hit a three-month high in May, due to higher payroll costs.
"Higher salary payments more than offset lower fuel costs, which meant that overall input price inflation edged up," Tim Moore, economics director at S&P Global Market Intelligence, said.
Euro zone business activity was supported last month by the bloc's dominant services industry offsetting a deepening decline in the manufacturing sector, according to a survey which also showed overall price pressures had abated.
HCOB's final Composite Purchasing Managers' Index (PMI), compiled by S&P Global, fell to a three-month low of 52.8 in May from April's 54.1. While still comfortably above the 50 mark, it was below a preliminary estimate for 53.3.
Meanwhile, the US ISM services PMI fell sharply to 50.3 against expectations of a small increase to 52.6, a sign that credit conditions and the drawdown of pandemic savings are finally hitting services activity.
China’s Caixin service PMI hit 57.1 in May versus 56.4 in April, the fifth consecutive month of expansion after its anti-covid lockdown measures were unwound late last year.
Japan’s services PMI hit 55.9 in May, the ninth straight month of growth and an improvement from April’s reading of 55.4.
Investors will also be watching the Reserve Bank of Australia’s policy meeting and the country’s first-quarter GDP figures this week – as well as the Bank of Canada’s monetary policy rate decision.
Eurozone GDP, US wholesale inventories and initial jobless claims are due on Thursday, which will also be on the radar of investors.
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