Wall St rallies as oil prices gain

The Australian share market is set to lift after Russia flagged support for efforts to limit oil production.

A rise in oil prices sparked gains in US stocks. Picture: Spencer Platt/Getty Images/AFP.

US stocks rose as a fresh climb in oil prices boosted shares of energy companies.

European stocks were also buoyed buy the gains in oil, while investors cheered the falling pound which could lift the earnings of exporters.

The Australian share market is set to follow global markets higher, with ASX futures up 21 points at 7.30am (AEDT).

Monday’s gains came after Russian President Vladimir Putin supported international efforts to limit oil supplies. Analysts and investors said crude prices could be volatile this week with energy companies and oil producers meeting in Istanbul for the World Petroleum Congress amid hopes for an broad agreement to cut production.

The Dow Jones Industrial Average rose 89 points, or 0.5 per cent, to 18329. The S&P 500 climbed 0.5 per cent and the Nasdaq Composite added 0.7 per cent.

Energy shares in the S&P 500 rose 1.5 per cent and US crude prices climbed 3.1 per cent to $US51.35 a barrel, their highest closing value since July 2015. Exxon Mobil and Chevron were among the biggest gainers in the Dow industrials, rising 2 per cent and 1.7 per cent, respectively.

Shares of Mylan NV rose 8.2 per cent after the pharmaceuticals firm agreed to pay $US465 million to settle allegations that it overcharged the government for its EpiPen products. The Nasdaq Biotechnology Index rose 1.4 per cent.

Some investors said trading volumes were thin due to holidays in Japan, Hong Kong and Canada, as well as Columbus Day in the US, with the bond market closed.

Wall Street ended a touch lower Friday following a slightly softer-than-expected monthly jobs report. Still, the jobs figures ultimately did little to shift investors’ expectations for the course of US interest-rate rises.

US Federal Reserve Vice Chairman Stanley Fischer said Sunday that the most recent jobs report was “solid, showing continued improvement” and that the decision to hold rates steady in September was a “close call.”

Investors were also preparing for fresh insights into corporate earnings, with third-quarter reports expected this week from Alcoa and big banks including J.P. Morgan and Wells Fargo. Companies in the S&P 500 are expected to report an earnings decline for the sixth consecutive quarter, according to analysts polled by FactSet.

“If we can somehow get to flat in earnings, that would be very supportive of equity markets in general,” said Jon Adams, investment strategist at BMO Global Asset management.

“At some point, we need to see top-line growth to justify [current] valuations,” he said.

Stocks in Europe recovered from an early fall in the banking sector to advance after three sessions of losses. The Stoxx Europe 600 rose 0.7 per cent, with oil and gas stocks gaining 1.9 per cent. The euro fell 0.4 per cent against the dollar to $US1.1136.

Investors in the region also continued to track negotiations between the UK and the European Union. The British pound was down 0.6 per cent against the dollar at $US1.2361 after briefly falling as much as 6 per cent in a few minutes during Asian trading hours Friday.

European Central Bank President Mario Draghi said Saturday that the UK’s vote to leave the EU was very significant. “To think that it won’t have any consequence would be to hope for too much,” he said.

Despite a recovery in the currency, investors said Friday’s steep fall highlighted continued concerns about the UK’s vote to leave the European Union and its implications for sterling.

“The UK in many ways is looking like a vulnerable emerging market economy, with a huge current-account deficit and alarming political trends,” said Chris Scicluna, head of economic research at Daiwa Capital Markets Europe. He expects the British currency to continue to decline sharply against the dollar in coming months.

Gold rose 0.7 per cent to $US1,257.50 an ounce.

Shanghai stocks gained 1.4 per cent as Chinese markets reopened from a week-long holiday, and the Chinese central bank set the yuan’s reference exchange at a six-year low against the dollar.

Dow Jones

Dow Jones