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Morning Market Update: Bullish Into New Week

Global stocks advanced on Friday, driven by news on economic growth in Europe amid speculation that the Fed will defer its tapering plans.

European stocks strengthened for a second session, trimming the biggest weekly decline in two months, as euro-area consumer confidence and U.K. economic growth exceeded forecasts.

The Stoxx 600 Index climbed 0.4% to 304.7 at the close of trading in London.

The FTSE 100 added 45 points (+0.7%) to settle at 6492 while the German DAX put on 19 points (+0.2%) to close trading at 8417.

These changes were driven by news that, euro-area consumer sentiment rose to the highest level in two years in August according to the European Commission. The index of household confidence increased to minus 15.6 from minus 17.4 in July.

In line with this, U.K. gross domestic product increased 0.7% in the second quarter from the previous period, when it rose 0.3%, the Office for National Statistics said in London.

Across the Atlantic, U.S. stocks rose, with the S&P 500 posting its first two-session rally in three weeks, as investors watched Federal Reserve officials for signals on stimulus cuts after data showed that home sales plunged.

The S&P 500 climbed by seven points (+0.4%) to sit at 1664 while the blue-chip Dow rose 47 points (+0.3%) to close Friday’s trading session at 15011.

Data from the Commerce Department showed that purchases of new U.S. homes plunged in July by the most in more than three years and previous months were revised down, a sign that growth in the industry may be taking a pause as mortgage rates rise.

In the commodity markets, gold jumped to a 11-week high, topping $1,400 an ounce in spot trading, as sales of new U.S. homes fell more than forecast, boosting speculation that the Federal Reserve will maintain economic stimulus.

On the Comex in New York, bullion futures for December delivery reached $1,399.90 before settling at $1,395.80, up 1.8%.

Crude climbed the most in two weeks in speculation the Federal Reserve will defer tapering stimulus measures after the release of U.S. homes purchases numbers. Oil for October delivery increased $1.39 to settle at $106.42 a barrel on the New York Mercantile Exchange.

There is no major local data slated for release during today’s session.

Morning Market Update: Bullish Into New Week is a post from: Australian Stock Report Market Pulse Blog