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GLOBAL MARKETS-'Relief rally' pushes equity markets higher; bonds flat

Mon, 28th Sep 2020 15:36

* MSCI world index jumps nearly 1.8%

* Dollar falls from two-month highs

* U.S. Treasury yields hover near 0.66%
(Adds quote, updates through midmorning trading)

By David Randall

NEW YORK, Sept 28 (Reuters) - Global equity markets surged
and the dollar fell from two-month highs Monday as investors
moved into the shares of beaten-down sectors such as banks and
travel stocks on the heels of a sharp stock market sell-off the
week before.

Asian shares gained, with Chinese shares boosted by data
over the weekend showing China’s industrial firms grew for the
fourth consecutive month in August.

"We’re seeing a bit of a relief rally," said Jonathan Bell,
chief investment officer at Stanhope Capital. "Things got
oversold perhaps a little bit in the short term."

"We saw quite a lot of exuberance in July and August, with
prices particularly of tech stocks rising and that then has come
off a little bit recently," he said.

MSCI's gauge of stocks across the globe
gained 1.79% following broad gains in Asia and Europe.

The STOXX 600's banking stock index was up 4.4%, after
hitting a fresh all-time low on Friday.

In midmorning trading on Wall Street, the Dow Jones
Industrial Average rose 488.98 points, or 1.8%, to
27,662.94; the S&P 500 gained 54.73 points, or 1.66%, to
3,353.19; and the Nasdaq Composite added 162.86 points,
or 1.49%, to 11,076.42.

Hotels, banks, and airline stocks all gained more than the
broad market, with shares of Delta Air Lines Inc up
nearly 4% and Bank of America Corp up nearly 2.5%.

The dollar index fell, erasing some of last week's gains,
down 0.4% on the day at 94.157 at 7:54 a.m. EDT (1154 GMT)

Investors remain broadly cautious in light of rising new
COVID-19 infections in Europe, which pose the risk of further
restrictions on activity.

Benchmark 10-year notes last fell 1/32 in price
to yield 0.661%, from 0.659% late on Friday.

"You're seeing a nice bounce for stocks, but it’s more of an
oversold bounce, and the bond market is still apprehensive about
totally buying in on this equity move," given the uncertainty
over additional fiscal stimulus in the United States and the
Nov. 3 presidential election, said Ryan Detrick, chief market
strategist at LPL Financial.

U.S. crude recently rose 0.62% to $40.50 per barrel
and Brent was at $42.14, up 0.52% on the day.

(Reporting by David Randall; editing by Jonathan Oatis)

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