Global stocks soar for fourth consecutive month

Global stocks saw a modest increase on Friday and are poised for a fourth consecutive month of gains despite significant selling in early August.

MSCI's broad index of global shares edged 0.1% higher on Friday to head for a 1.8% monthly gain while the dollar index was set for a more than 2.5% monthly decline after also dropping in July, News.Az reports citing Reuters.

That marked a stunning recovery from a turbulent start to August when a slew of weaker-than-expected U.S. economic data and a surprise Bank of Japan rate hike wreaked chaos in currency carry trades and drove an Aug. 5 equity sell-off reminiscent of October 1987's "Black Monday".

The next few weeks could be volatile across global markets, however, as investors puzzle over whether U.S. growth is now in fact too strong for the Fed to ease monetary conditions rapidly.

The U.S. economy grew faster than initially thought in the second quarter of this year because of strong consumer spending, and corporate profits, a report on Thursday showed.

The release later on Friday of U.S. core personal consumption expenditures (PCE), the Fed's favoured inflation measure, also has the potential to shift the rate outlook.

Money markets are confidently pricing the Fed's first 25 basis point (bp) cut of this cycle at its Sept. 18 meeting, with a 33% chance of a jumbo 50 bp reduction.

That view continued to lift equity markets worldwide on Friday. Europe's Stoxx index rose 0.2% to a record intraday high in early dealings and Britain's FTSE 100 hit a three-month high.

U.S. stock futures also pointed to an extension of Wall Street's positive run, with Nasdaq contracts 0.7% higher and those tracking the S&P 500 index up 0.4% .

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7%, set for a 2.2% monthly increase.
Japan's Nikkei following its early month collapse, was set to lose 1.6% for the month but rose 0.3% on Friday.

Against the yen , the dollar last stood at 144.79 and was set to lose more than 3% for the month, as pressure eased on the Japanese currency on the prospect of narrowing interest rate differentials.

Core inflation in Japan's capital Tokyo accelerated for a fourth straight month in August, data showed on Friday, with the 2.4% price increase signalling further BoJ rate hikes ahead.

The euro fell 0.02% to $1.1075, having declined 0.38% in the previous session after lower-than-expected German inflation data added to bets of further European Central Bank (ECB) rate cuts.

Euro zone government bonds were little changed ahead of bloc-wide inflation figures on Friday. The German 10-year bond yield , the benchmark for the euro zone, slipped 0.8 basis points to 2.28% and the interest rate sensitive two-year yield DE2YT=RR was little changed at 2.36%.

In commodities, Brent crude futures added 0.7% to $80.51 a barrel, while U.S. crude futures gained 0.8% to $76.54

Spot gold was steady AT $2,519.86 an ounce, though was set for a 2.7% gain for the month, helped by the weaker dollar.

News.Az