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Recovery hopes to underpin Wall Street, vaccine makers slide

Recovery hopes to underpin Wall Street, vaccine makers slide

FILE PHOTO: A man wearing a face mask is seen inside the Shanghai Stock Exchange building, as the country is hit by a novel coronavirus outbreak, at the Pudong financial district in Shanghai, China February 28, 2020. REUTERS/Aly Song/File Photo

LONDON: Wall Street was set for a steady start on Thursday as confidence in the economic recovery offset jitters in American pharmas over rights to their COVID vaccines.

Futures contracts in the S&P 500, Nasdaq and Dow Jones Industrials were all slightly firmer.

The Dow Jones industrial average hit a record high on Wednesday as investors bet on recovery from the pandemic lifting 'cyclical' companies that typically rise in lockstep with an economic rebound.

Analysts expect data on Thursday to show a decline in weekly jobless claims in the United States, reinforcing the recovery picture.

Friday's U.S. monthly jobs report is also expected to show that nonfarm payrolls increased by 978,000 jobs last month.

Shares in Pfizer, Moderna and other pharmaceutical companies remained under pressure after President Joe Biden on Wednesday supported waiving intellectual property rights on COVID-19 vaccines to boost the fight against the pandemic, piling pressure on Europe to follow suit.

Investors drew comfort from the latest economic data and forecasts in Europe which pointed to a recovery still on track.

Retail sales in the euro zone beat expectations with a 2.7per cent rise in March as curbs on shoppers eased. "This bodes well for the months ahead when further restrictions can be expected to be lifted," ING bank said.

The Bank of England increased its forecast for Britain's economic growth this year after its coronavirus slump.

The STOXX index of 600 European companies was flat, still near last month's record high. The MSCI's broadest gauge of world stocks, ACWI, was up 0.18per cent at 700.98 points, about 10 points short of its record high, also set last month.

"I have seen nothing in this week's price action to change my view that ultimately the economic prospects in the short to medium term look fairly positive, though events in India could derail any global recovery, particularly if COVID variants migrate out of India," said Michael Hewson, chief market analyst at CMC Markets.

The dollar index eased 0.3per cent to 90.99.


Commodity prices also drew strength from the prospects for economic recovery, with copper flirting with 10-year peaks.

But oil prices gave up initial gains despite crude stockpiles in the United States, the world's largest oil consumer, falling more sharply than expected.

U.S. crude futures stood at US$65.23 per barrel, off 0.6per cent on the day and just below Wednesday's two-month high of US$66.76.

In Asia, Japan's Nikkei jumped 1.8per cent as it reopened after a five-day holiday.

MSCI's index of Asia-Pacific shares outside Japan gained 0.19per cent. But Chinese shares, also resuming trade for the first time since last week, wobbled. The CSI300 fell 1.2per cent, led by falls in biotech firms.

U.S. nominal bond yields held relatively steady, with the 10-year U.S. Treasuries yield little changed at 1.5749per cent.

The euro was also little changed at US$1.2048 while the yen changed hands at 109.12 per dollar. Gold rose 0.4per cent.

(Editing by Kirsten Donovan)

Source: Reuters


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