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Global shares rise on US housing data; Ukraine vote looms

LiveMint logoLiveMint 23-05-2014 Herbert Lash

New York: Global equity markets edged higher on Friday after better-than-expected US housing data lifted Wall Street into record territory, but yields on treasuries fell on uncertainty about elections in Ukraine over the weekend.

The benchmark S&P 500 rose above a closing record high set 10 days ago, but was still shy of an all-time intraday high above 1,900.

MSCI’s measure of global equity performance closed in on all-time peaks last seen in November 2007. But the gains were likely a precursor to selling pressure before the close, when the US investors are likely to fret about the outcome of the Ukraine elections over a long weekend.

“You had a positive data point this morning with the new home sales and the revision of the prior month, so all that’s great,” said Philip Orlando, chief equity market strategist at Federated Investors in New York.

“But it would not surprise me if we saw some profit-taking toward the end of the day to position going into the long weekend with this Ukraine-Russia stand-off out there on the horizon,” he added.

Sales of new US single-family homes rose more than expected in April and the number of houses on the market hit a 3-1/2 year-high, further signs the housing recovery is poised to regain steam, the commerce department said.

MSCI’s all-country world index rose 0.3% to 418.33, about 2.4% from all-time peaks set in November 2007.

In Europe, the FTSEuroFirst 300 index of leading regional shares closed up 0.21% to 1,369.17.

The Dow Jones industrial average was up 60.57 points, or 0.37%, at 16,603.65. The Standard & Poor’s 500 Index was up 7.91 points, or 0.42%, at 1,900.40. The Nasdaq Composite Index was up 29.65 points, or 0.71%, at 4,183.99.

Traders sought safe-haven bonds on the belief that elections in Greece and Ukraine could result in market volatility, including renewed worries of a Greek exit from the euro and the potential for greater tensions surrounding Ukraine.

“European parliamentary elections and Ukraine elections are key events in the near term which could be driving people into the safety of US treasuries,” said Robbert Van Batenburg, director of market strategy at Newedge USA LLC in New York.

If Greece’s leftist Syriza party wins, its leaders could reject the government’s austerity policies and threaten to leave the euro zone, he said.

If pro-separatist voters in eastern Ukraine fail to participate, it could stoke further tensions between Russia and Ukraine. The US government bond prices rose, with the 10-year note up 5/32, yielding 2.5356%.

The euro fell to a three-month low of $1.3614 and a 17-month trough against the pound after soft German business sentiment stoked expectations the European Central Bank (ECB) will lower interest rates next month.

Concerns that Sunday’s European Union election results could destabilize some euro zone governments also weighed on the euro. The euro was last at $1.3633, down 0.15%.

The dollar gained 0.24% against the yen at 101.96.

Brent crude held above $110 a barrel as US crude futures pushed higher, supported by the crises in Ukraine and Libya as well as positive economic data in the world’s top two oil consumers, the US and China. Brent settled up 18 cents at $110.54 a barrel. US crude gained 61 cents to $104.35. Both Brent and US crude futures posted consecutive weekly gains. Reuters

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