OIL prices rose to a multi-month peak yesterday in the wake of Opec supply cuts while global stocks were mixed following disappointing China data.

China slipped into deflation for the first time in more than two years last month, official data showed, as slowing domestic spending weighs on the post-Covid economic recovery.

The data came on the heels of lacklustre China trade figures on Tuesday. An extended period of disappointing indicators out of Beijing this year has ramped up pressure on authorities there to provide much-needed support to the economy.

However, while leaders have made a number of pledges in recent weeks to introduce stimulus – particularly for the property sector – there have been very few concrete moves save for some small interest rate cuts by the People’s Bank of China.

Observers warned that the headline-grabbing bazooka officials have unleashed in the past is unlikely owing to the country’s huge debt pile and concerns about an already weak yuan.

Despite the anaemic China figures, crude oil prices vaulted higher with European benchmark Brent futures jumping 1.6% to US$87.55 (RM400.19) a barrel, its highest reading since January.

US benchmark West Texas Intermediate rose by a similar percentage to finish at its highest level since November last year. 

Production limitations set by the Opec+ exporters “are continuing to offset concerns over demand,” said Fawad Razaqzada, market analyst at Forex.com.

Analysts have also cited the retreat in the dollar as a supporting factor for oil prices. Crude is denominated in the US currency.

Large tech shares led US stock indices lower yesterday, with Amazon, Facebook parent Meta and Netflix all falling 1.5% or more.

Investors have been cautious ahead of today’s closely watched Consumer Price Index data in the United States, which is seen as influential in Federal Reserve monetary policy.

Meanwhile, European bank shares gained one day after sliding when Italy imposed a windfall tax on lenders and owing to concerns over the health of the sector in the United States.

The rebound came as the government limited a windfall tax to 0.1% of assets.

The sector had shed around US$10 billion Tuesday on an initial announcement of a plan by the far-right government of Giorgia Meloni to take 40% of “surplus profits” before the Finance Ministry stepped in to clarify that the scope of the tax would be limited and “preserve the stability of banking institutions” and calm a market storm.

Yesterday saw the sector bounce back strongly on the Milan bourse, with Intesa Sanpaolo adding 2.3%, rival UniCredit 4.4% and Banco BPM 5.4 at the close.

Key figures around 8.40pm:

New York - Dow: DOWN 0.5% at 35,123.36 (close)

New York - S&P 500: DOWN 0.7% at 4,467.71 (close)

New York - Nasdaq: DOWN 1.2% at 13,722.02 (close)

London - FTSE 100: UP 0.8% at 7,587.30 (close)

Frankfurt - DAX: UP 0.5% at 15,852.58 (close)

Paris - CAC 40: UP 0.7% at 7,322.04 (close)

EURO STOXX 50: UP 0.7% at 4,317.33 (close)

Tokyo - Nikkei 225: DOWN 0.5% at 32,204.33 (close)

Hong Kong - Hang Seng Index: UP 0.3% at 19,246.03 (close)

Shanghai - Composite: DOWN 0.5% at 3,244.49 (close)

Euro/dollar: UP at US$1.0975 from US$1.0956 on Tuesday

Pound/dollar: DOWN at US$1.2720 from US$1.2748 

Euro/pound: UP at 86.26 from 85.94 pence 

Dollar/yen: UP at ¥143.69 from ¥143.38

Brent North Sea crude: UP 1.6% at US$87.55 per barrel

West Texas Intermediate: UP 1.8% at US$84.40 per barrel. – AFP, August 10, 2023.