European stocks rise, while oil fails to recover losses

European stocks rose on Monday while oil maintained its losses after sliding to the lowest close since May.

Gold extended its first back-to-back weekly drop since May as the US dollar strengthened against most major currencies.

The yen weakened before a Friday policy announcement where Bank of Japan Governor Haruhiko Kuroda will face the most intense expectations for more monetary stimulus since 2013.

US crude oil traded near $44 a barrel.

The Stoxx Europe 600 Index added 0.4 per cent after the SandP 500 Index ended last week at a fresh record, while Asia’s benchmark share gauge swung between gains and losses.

US equities climbed on Friday amid signs of strength in the American economy and speculation that central banks will act to cushion any blow from the UK’s Brexit vote.

An increase in purchases of exchange-traded funds is seen by economists as the most likely stimulus for the BOJ to announce this week, while the Federal Reserve is expected to stand pat.

Group of 20 finance chiefs indicated concern over the anti-globalisation sentiment gripping the world at a meeting in China at the weekend.

"Market expectations of the Fed raising interest rates by the end of this year have increased significantly over the last two weeks, and it is likely that the Fed could be conveying a more optimistic message about the US economy," said Vyanne Lai, an economist at National Australia Bank.

“This will likely bolster the strength of the dollar and weigh on gold prices.”

Fed policy makers will meet on July 26-27th with traders pricing in 10 per cent odds of a rate rise, while the probability for a move by December rose to 45 per cent from 12 per cent at the beginning of this month.

Stocks

Travel and technology companies were the biggest gainers among European equities, with Ryanair rallying 6.1 per cent as of 8:24am in London after maintaining its full-year profit forecast.

William Hill jumped 11 per cent as 888 Holdings and The Rank Group are considering a joint takeover offer for the bookmaker.

Global fund managers are bailing from the region’s stocks at the fastest clip ever, even though the Euro Stoxx 50 Index yields 3.7 percentage points more than bonds in dividends, and companies are on average about 25 per cent cheaper than the SandP 500.

The Borsa Istanbul 100 Index added 2.4 per cent after Turkish prime minister Binali Yildirim ruled out early elections and said the government plans a multibillion dollar infrastructure fund to keep growth on track.

The stock measure sank 13 per cent last week, the most since 2008, amid sweeping purges of those accused of complicity in the failed attempt July 15th by military officers to seize power.

Sterling added 0.3 per cent, recovering some of Friday’s 0.9 per cent slide, which had been spurred by reports suggesting manufacturing and services industries contracted in July.

West Texas Intermediate crude slipped 0.3 per cent to $44.07 a barrel after sliding 1.3 per cent on Friday to its lowest settlement since May 9th.

Rigs targeting oil in the US rose for a fourth week to 371, the longest run of gains since August, according to Baker Hughes Money managers also added the most bets in a year on falling WTI prices during the week ended July 19th, according to Commodity Futures Trading Commission figures.

"The general tone for the market at the moment is soft to sideways," Ric Spooner, chief analyst at CMC Markets in Sydney, said by phone.

"It's being weighed down by US dollar strength against a background of relatively high inventories and the fact the rig count has begun to creep up." –(Bloomberg )