Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Global stocks close lucrative May on a high, sterling hits eight-week low

Stock MarketsMay 31, 2017 07:41AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt

By Jamie McGeever

LONDON (Reuters) - Stocks rose on Wednesday as investors looked to close the month on a high, while sterling fell after an opinion poll suggested the ruling Conservatives could lose seats in next week's UK general election, potentially leading to a hung parliament.

World stocks are poised to end May up nearly 2 percent, marking the seventh straight monthly increase and the longest monthly winning streak in over a decade.

MSCI's global equity index (MIWD00000PUS) rose 0.1 percent on Wednesday, sterling's earlier slide helped lift Britain's FTSE 100 (FTSE) to a fresh record high, and Germany's DAX (GDAXI) rose 0.5 percent.

U.S. futures pointed to a rise of 0.1 percent on Wall Street. (ESc1)

European stocks gained 0.2 percent (FTEU3) (STOXX) after a sharp fall in euro zone inflation led investors to believe the European Central Bank won't be quite as hawkish at its policy meeting next week than had been expected.

"The data suggest no need for the ECB to raise its refinancing rate before 2019. In the meantime, the Governing Council will feel comfortable enough to turn more neutral in its risk assessment at its meeting next week," said Florian Hense, economist at Berenberg Bank.

The first estimate of euro zone inflation this month showed at fall to 1.4 percent from 1.9 percent April, falling short of analysts' forecast of 1.5 percent. Euro zone unemployment fell to an eight-year low of 9.3 percent, also below consensus.

Earlier in Asia, shares drew some support from data that showed activity in China's manufacturing sector grew at the same pace in May as in April, although a sturdy performance from the Japanese yen helped push the Nikkei into the red (N225).

MAY DAY

The biggest mover in currencies was sterling, which shed as much as 0.5 percent after a YouGov poll showed the ruling Conservative Party might lose 20 of the 330 seats it holds while the opposition Labour Party could gain nearly 30 seats.

Sterling fell to a six-week low of $1.2770 before recovering some ground to $1.2830. It also slipped to 0.8748 pound per euro (EURGBP=D4), near Friday's eight-week low of 0.8750.

On a trade-weighted basis, the pound slid to a new eight-week low of 77.2 <=GBP>.

New constituency-by-constituency modelling by YouGov showed the ruling Conservative Party might lose 20 seats at the June 8 election while Labour could gain nearly 30 seats, potentially leading to a hung parliament, The Times said.

The news came after a string of opinion polls showed a narrowing lead for prime minister Theresa May's Conservatives, shaking investors' confidence that she would easily win a majority and strengthen her hand in the Brexit negotiations.

"We're getting very negative on sterling again," said George Saravelos, FX strategist at Deutsche Bank (DE:DBKGn).

"If May is unable to deliver a substantially increased majority, her flexibility to negotiate will not have improved. A strong Conservative majority is also only a necessary, not sufficient condition for a smooth Brexit," he said.

The euro shrugged off the soft inflation data and rose 0.3 percent to $1.1217 <EUR=>, while 10-year German bond yields retreated from an earlier rise to trade steady on the day at 0.294 percent. <DE10YT=TWEB>

The dollar was down 0.1 percent against the yen at 110.75 yen <JPY=>, and the 10-year U.S. Treasury yield was also flat on the day at 2.22 percent (US10YT=RR). Two weeks ago it was at 2.41 percent.

In commodities, oil prices remained soft, as concerns lingered about whether the extension of output cuts by OPEC and other producing countries will be enough to support prices.

U.S. crude futures (CLc1) fell 2.2 percent to $48.57 a barrel. Global benchmark Brent (LCOc1) was down 2.5 percent at $50.53 per barrel.

Gold <XAU=> edged up 0.1 percent to $1,264 an ounce.

Global stocks close lucrative May on a high, sterling hits eight-week low
 

Related Articles

Hope rally turns choppy as hot U.S. inflation looms
Hope rally turns choppy as hot U.S. inflation looms By Reuters - Dec 08, 2021 3

By Tom Westbrook SYDNEY (Reuters) - Stocks rose in choppy trade on Thursday as worries about the economic impact of the Omicron coronavirus variant ebbed but increasing caution...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email