A gauge of global equity performance rose within 1 per cent of a record high on Thursday, a day after the Federal Reserve cut interest rates, but crude oil prices climbed higher on concerns last weekend’s attacks on Saudi Arabia’s oil facilities pose supply risks.
Iran warned U.S. President Donald Trump against being dragged into all-out war in the Middle East after the attacks, which Washington and Riyadh blame on Tehran.
About half of Saudi crude production was disabled, putting severe limits on the country’s spare capacity, a cushion for global oil markets if an outage occurs.
“The Saudi oil industry could be threatened again and we could see more supply disruption from the Persian Gulf,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
Brent crude futures, the global benchmark, gained 80 cents to settle at $64.40 a barrel, while U.S. West Texas Intermediate crude settled up 2 cents at $58.13 a barrel.
Canada’s main stock index hit another record high on Thursday, powered by gains in the materials sectors.
The Toronto Stock Exchange’s S&P/TSX Composite index set a new all-time high of 16,901.76 points.
It unofficially finished up 50.48 points, or 0.35 per cent, at 16,859.77.
Eight of the index’s 11 major sectors were higher with the materials sector adding 1.7 per cent.
The sector, which includes precious and base metals miners and fertilizer companies, rose after gold bounced above $1,500 an ounce as focus returned to global growth risks and Middle East tensions.
Among the largest percentage gainers on the TSX were shares of First Quantum Minerals Ltd., which jumped 6.3 per cent, and Barrick Gold Corp., which rose 3 per cent.
The energy sector slipped 0.4 per cent, while marijuana stocks pushed the health care down by 3.2 per cent.
Canada added 49,300 jobs in August as hiring in the trade, transportation and utilities sector led broad-based gains, according to a report from ADP released on Thursday.
Canadian home prices rose for the fourth consecutive month in August, while the annual increase in prices picked up for the first time in nine months, data on Thursday showed.
Leading the index were First Quantum Minerals Ltd., up 13.2 per cent, CannTrust Holdings Inc., up 5.2 per cent, and OceanaGold Corp., higher by 5.2 per cent.
Lagging shares were Canopy Growth Corp., down 8.7 per cent, Cronos Group Inc., down 6.5 per cent, and Aphria Inc., lower by 3.8 per cent.
European banking shares rose 1.9 per cent and the Swiss franc posted its biggest gain in two weeks after the Swiss National Bank declined to match the European Central Bank and the Fed in easing monetary policy.
Major central banks have been loosening policy, mostly by cutting rates, to stem a slowdown in global growth.
Upbeat U.S. data suggests the U.S. economy is still on a moderate growth path. The number of Americans filing for unemployment benefits increased less than expected last week, pointing to strong labor market conditions.
The pan-regional FTSEurofirst 300 index of leading European shares closed up 0.64 per cent, while MSCI’s gauge of stocks across the globe gained 0.21 per cent. MSCI’s emerging markets index fell 0.46 per cent.
Gains in Microsoft Corp shares pushed the S&P 500, the U.S. equity benchmark, closer toward its record high, while a rally in bank stocks lifted European shares after the Fed set a higher bar for further rate reductions on Wednesday.
Microsoft, the biggest U.S. stock by market cap, valued at $1.08 trillion, hit $142.37 before paring some gains to trade about 1.8 per cent higher on the day. The S&P 500 at one point traded 6 points below its all-time peak of 3,027.98 set in July.
The Dow Jones Industrial Average fell 52.9 points, or 0.19 per cent, to 27,094.18, the S&P 500 gained 0.03 points, or 0.00 per cent, to 3,006.76 and the Nasdaq Composite added 5.49 points, or 0.07 per cent, to 8,182.88.
The U.S. dollar fell against the euro, the Swiss franc and the Japanese yen after the Fed cut rates by 25 basis points on Wednesday to provide insurance against the risk of weaker global growth and resurgent U.S-China trade tensions.
Sterling jumped, rising 0.64 per cent to $1.2548, after European Commission President Jean-Claude Juncker said a Brexit deal is possible.
The dollar index fell 0.3 per cent, with the euro up 0.23 per cent to $1.1054. The Japanese yen strengthened 0.44 per cent versus the greenback at 107.99 per dollar.
U.S. Treasury yields fell after division appeared among policymakers on whether the Fed would cut rates further and as pressures in the short-term funding markets eased.
Benchmark 10-year notes rose 2/32 in price to push their yield down to 1.7752 per cent.
U.S. gold futures settled down about $9, or 0.6 per cent, to $1,506.20 an ounce.