Qatar- US tech shares rally as oil falls on 'freeze' deal
Date
2/18/2016 11:08:18 PM
New York:A rally in beaten-down technology shares lifted US stocks Tuesday as the oil market gave a lackluster response to a conditional agreement between Saudi Arabia and Russia to limit output.
But equities in Europe failed to keep up the momentum from Monday's rally as the ZEW survey showed that German investor sentiment hit a 16-month low in February on fears over the recent oil collapse and China's slowdown.
Sentiment in Europe was also dented by another drop in oil prices following news that Saudi Arabia Russia Venezuela and Qatar reached a preliminary deal to freeze output at January's level but only if other major producers followed suit.
Analysts welcomed Saudi Arabia's shift to open the door to limiting production but expressed disappointment that the agreement was not more aggressive.
"The news has actually disappointed the market slightly because some people had hoped to see a cut rather than a production freeze" said City Index analyst Fawad Razaqzada.
Petroleum-linked equities were mixed with London-listed Royal Dutch Shell climbing and mid-sized US producers like Marathon Oil and ConocoPhillips ending lower.
"The stock market rally of the past two days has petered out with investors again taking their cue from a slumping oil price" said CMC Markets analyst Jasper Lawler.
The Paris CAC slid 0.1 percent while Frankfurt's DAX dropped 0.8 percent. London's FTSE 100 rose 0.7 percent.
Shanghai gains as yuan firms
US equities had a good day after Wall Street was closed Monday for a holiday with the tech-rich Nasdaq adding 2.3 percent and the broad-based S&P 500 adding 1.7 percent.
Some of that was tied to the rebound in the Chinese stock market Tuesday and by the show of strength in European markets on Monday said Chris Low chief economist at FTN Financial.
Shanghai shares surged 3.3 percent and Hong Kong ended up 1.1 percent on speculation China is preparing stimulus measures to boost the world's number two economy and the yuan jumped Monday after People's Bank of China head Zhou Xiaochuan told a financial newspaper that there was "no foundation for continued depreciation."
Analysts expect further monetary loosening after six interest rate cuts in the 12 months to November and several cuts in the amount of funds banks keep in reserve.
AFP