GLOBAL MARKETS – Stocks envision third week of gains after tech boost, dollar plunges


* FAANG stocks in focus before profits

* Evergrande avoids default with surprise interest payments

* Flat crude, falling dollar, rising gold

By Simon Jessop and Kevin Buckland

LONDON / TOKYO, October 22 (Reuters) – Global stocks were on track for their third straight week of gains on Friday, supported by tech stocks in Asia overnight, as the dollar fell and oil prices remained stable.

MSCI’s largest global equities indicator was up 0.1% in early European trading, 1.4% higher on the week and just 0.8% from its all-time high. Major European markets were all up, with the biggest being the UK FTSE 100, up 0.4%.

This follows gains in Asia, where equity investors were also comforted by news that heavily indebted Chinese real estate company China Evergrande Group made a surprise interest payment, avoiding a default for now.

Japan’s Nikkei rose 0.3%, led by the tech sector, while energy and basic materials stocks were the biggest drag as coal futures extended their losses after Beijing signaled it would intervene to calm soaring prices that contributed to the country’s electricity shortage.

More generally, investors are increasingly worried that persistent inflation will force central bankers to tighten monetary policy at a time when global economic growth remains fragile.

Mark Haefele, Chief Investment Officer, UBS Global Wealth Management, told clients in a note that stocks could rise further, despite growing concerns about the impact of inflation and the potential for tightening central bank policy.

“With the current problems always appearing to be more temporary than structural, we believe the stock markets will continue to advance,” Haefele said.

“Indeed, small increases in inflation expectations can be positive for markets if they help allay deflation fears. In addition, according to our assessment, global growth remains strong, supply chain challenges are expected. subside until 2022 and corporate profits are expected to continue to grow. “

US equity futures are pointing to an open lower 0.1%, after the cash index hit an all-time high close to close overnight, led by the surge in tech stocks.

Next week, Facebook, Apple, Amazon and Alphabet, the owner of Google, all report, with the Bulls hoping to keep up with Netflix’s above-forecast earnings this week.

Meanwhile, benchmark 10-year Treasury yields stood at 1.6828%, retreating from a five-month high of 1.7050% reached overnight.

The dollar index, which values ​​the greenback against six major rivals, fell 0.1% to 93.639 on Friday, although it initially rebounded from recent lows after U.S. jobless claims fell to a 19-month low, indicating a tighter labor market.

The Fed has signaled that it could start cutting stimulus as early as next month, with rate hikes to follow at the end of next year. Full employment is among the requirements set out by the Fed for rates to take off.

Fed Chairman Jerome Powell will speak later Friday at a panel discussion.

Among commodities, oil was flat, with Brent crude pegged for its first losing week in seven and West Texas Intermediate its first in nine.

Gold was up 0.5% on the weaker dollar, on track for its second week of gains.

(Edited by Simon Cameron-Moore and Hugh Lawson)


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