Positive US retail sales data brings relief to markets

Global equities rose today on robust US retail sales data, rebounding from last week’s steep decline, while the euro fell, prompted by the European Central Bank’s strongest signal yet that it would ease policy to cool the single currency.

Encouraging news from the world's biggest economy, which was bogged down by a harsh winter, overrode fears of a military conflict in Ukraine which had punished stock prices earlier.

Ukraine’s president threatened military action after pro-Russian separatists occupying government buildings in the east ignored an ultimatum to leave and another group of rebels attacked a police headquarters in the region.

“This is the first report that activity is bouncing back from the winter weather,” said Craig Dismuke, chief economic strategist at Vining Sparks in Memphis, Tennessee said of the March figure on US retail sales, which jumped 1.1 per cent, the biggest monthly rise in 1.5 years. “This should set the foundation for stocks to go up a bit and bond yields to go higher,” Mr Dismuke said.

On Wall Street, the Dow Jones industrial average rose 76.49 points or 0.48 per cent, to 16,103.24, the S&P 500 gained 9.54 points or 0.53 per cent, to 1,825.23 and the Nasdaq Composite added 16.438 points or 0.41 per cent, to 4,016.172.

The MSCI world equity index, which tracks shares in 45 nations, held steady at 404.40 points, erasing an earlier loss of 0.3 per cent.

A flurry of M&A activity, including a $6 billion copper mine sale by Glencore Xstrata, helped cushion the falls, which were driven by a 0.6 percent decline in the Dax.

German-listed firms have some of the biggest links to Russia. Russian shares tumbled 1.31 per cent, while the rouble fell 0.8 per cent to its weakest level against the dollar in nearly three weeks European Union foreign ministers were to hold talks later today about tougher sanctions against Russia.

The worry for many is that the two sides end up imposing increasingly tough measures that will inevitably harm both. "The escalation sharply increases risks of an all-out civil war in Ukraine," Bank of America Merrill Lynch analysts said in a research note. Earlier, Japan's Nikkei stock average ended down 0.4 per cent at a fresh six-month closing low. It plunged 7.3 per cent last week, its biggest weekly fall since the devastating earthquake and tsunami in March 2011.

Reuters