MILAN, June 27 — World shares extended their gains today, building on Friday's strong Wall Street close, while oil prices came off their peaks, improving sentiment and tempering concerns of prolonged inflation.
"We think there are more chances of seeing oil prices going lower simply because of easing demand from the US, Europe and China due to the slowdown in the economy. This in turn should help reduce expectations on inflation at least for the very end of this year," said Jérôme Schupp, fund manager at Prime Partners in Geneva.
Traders said oversold market conditions and month-end portfolio rebalancing also contributed to the bounce, although they expected more volatility ahead as the second-quarter earnings season approaches. "Volatility is likely to remain elevated until we see convincing evidence that inflation is moderating, recession risks are receding, and geopolitical threats - especially from curbs on Russian energy exports - are declining," wrote Mark Haefele, CIO at UBS Global Wealth Management.
Brent rose 0.4 per cent to US$113.53 a barrel after suffering on Friday its biggest one-week drop since April, while US West Texas Intermediate futures added 0.1 per cent at US$107.83.