This Is What the OPEC Deal Did to Markets All Around the World, by Douglas Lytle

Fuente Web

The following markets reacted the most to yesterday’s announcement by OPEC ministers in Algiers to cut production for the first time in eight years:

• Stocks rallied in Asia and Europe; Stoxx Europe 600 Index +0.7%
• U.S. stocks and Treasuries declined as traders raised their inflation bets and comments from Federal Reserve officials suggested the Federal Reserve is moving closer to raising interest rates
• The Bloomberg Dollar Spot Index rose 0.2 percent from its lowest close in more than two weeks
• Malaysia’s ringgit gained most among currencies of commodity-exporting nations
• Japanese yen, South African rand led declines of energy importing countries
• U.S. crude gained 1.9 percent to trade near $48 a barrel, following 5.3 percent jump yesterday when in OPEC deal announced
• Sovereign bonds retreated across most of Asia and Europe amid speculation higher energy prices will revive inflation
• Travel companies, airlines, automakers declined in Europe and Asia; Bloomberg World Airlines Index -0.1%

• Energy producers led gains in the MSCI All-Country World Index. Royal Dutch Shell Plc jumped 6.6 percent, the biggest one-day advance since February, and Total SA climbed 4.2 percent. Cnooc Ltd. added 5.1 percent in Hong Kong. The deal is boosting optimism for a recovery in earnings, according to Derek Mitchell, a fund manager at Royal London Asset Management.

“It sends a message that there’s now a floor under the oil price,” he said. His fund manages 93.8 billion pounds ($122 billion) and owns shares of Shell and BP Plc. “A tighter oil market will support earnings and help sustain some of the dividends that were at risk.”

Read the full report here.