Global stocks rise as taper fears fade

Oil prices rose further following last week's gains

Global stock markets rose Monday as investors continued to respond to Federal Reserve boss Jerome Powell indicating the US central bank would be cautious in winding down its ultra-loose monetary policy and was in no hurry to lift interest rates.

Also on traders' minds was Hurricane Ida's damage to the US Gulf coast and its impact on oil prices, as well as the fast-spreading Delta variant of Covid-19.

In a closely-watched speech Friday, Powell said the world's top economy was well on the road to recovery from last year's pandemic-induced slump, with millions of jobs recovered and growth at its strongest in decades.

Powell said the central bank could be ready to slow the pace of its colossal bond-buying program this year, but would be patient about raising the benchmark interest rate while watching for the impact of the Delta variant and the labor market's recovery.

"Even if it wasn't a surprise, we can still say that Powell was a little more accommodating than expected and the idea of investors today is that, if he is more accommodating, it is because there may still be a slowdown in the economy," Gregori Volokhine of Meeschaert Financial Services told AFP.

A strong US jobs reading for August on Friday could step up the timetable for tapering to as early as September, although November remains more likely.

On Wall Street, the S&P 500 and Nasdaq set new records, while the Dow lost ground.

The positive mood filtered through to Asia, where Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei, Mumbai, Bangkok and Jakarta were all in positive territory.

In Europe, Paris and Frankfurt both rose, while London was closed for a holiday.

Oil prices rose further following last week's gains but retreated from their high point as investors balanced optimism in the economic recovery with concerns about damage to production capacity in the United States after Hurricane Ida.

"Signals so far seems to be that the US Gulf crude oil production facilities mostly have escaped severe damages," said commodities analyst Bjarne Schieldrop at SEB Research, adding that it was still too soon to fully ascertain the storm's impact on production.

The meeting Wednesday of OPEC and other major producers is also being keenly awaited, with some observers saying the Delta variant could cloud the outlook and force countries to slow their planned output increases.