Dollar, equities gain on upbeat manufacturing data
It has been learnt that Turkey has emerged as the world’s largest buyer of gold these days. PHOTO: AFP
The US dollar rallied and equity markets rose on Monday as investors welcomed upbeat manufacturing data from around the world and as Microsoft’s pursuit of TikTok’s US operations bolstered the red-hot technology sector.
Gold prices retreated from a record high after some profit-taking and the dollar’s strengthening, though concerns about the coronavirus’ toll on the economy limited bullion’s losses.
Oil prices rose as manufacturing data from the United States, Europe and China offset oversupply fears fueled by the prospect of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies winding back output cuts. MSCI’s benchmark for global equity markets rose 0.73% to 555.9. Europe’s broad FTSEurofirst 300 index added 2.18% to 1,415.15, lifted by a reading of IHS Markit’s final Manufacturing Purchasing Managers’ Index for the euro zone.
The index bounced to 51.8 in July, its first time above the 50 mark separating growth from contraction since January 2019.
Manufacturing activity in China expanded at the fastest pace in nearly a decade as domestic demand improved, China’s Caixin/Markit PMI showed, suggesting the world’s second-largest economy would help cushion the pandemic’s blow to world growth.
“There’s good feeling in the stock market. You’re seeing that with earnings and you’re seeing that with some of the PMI numbers,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. “People were really expecting the worse. Things are bad, but not as bad as predicted.”
Wall Street’s advance was driven by Microsoft, whose shares rose 4.1% after it formally declared interest in TikTok’s US operations on Sunday, Meckler said.
“Investors are going with what’s worked for them and they’ve decided technology has survived what they see as the worst of the pandemic,” he said.
On Wall Street, the Dow Jones Industrial Average rose 0.93%, the S&P 500 gained 0.76% and the Nasdaq Composite added 1.31%.
Of the S&P’s 11 major sectors, technology was the clear leader with a gain of more than 2.2%, also fueled by Apple’s overtaking of Saudi Aramco on Friday to become the world’s most valuable company.
Published in The Express Tribune, August 4th, 2020.
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