Stocks extend bear market bounce as inflation angst eases

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MILAN, June 27 —World shares extended their bounce on Monday, building on Friday's strong Wall Street close as off-peak oil prices helped sentiment improve and temper fears...

MILAN, June 27 —World shares extended their bounce on Monday, building on Friday's strong Wall Street close as off-peak oil prices helped sentiment improve and temper fears 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 seasons approaches. Oil was volatile as the market grappled with concerns over an economic slowdown versus worries about lost Russian supply amid sanctions over the Ukraine conflict.

"The market remains focused in the trade-off between the policy response to high inflation and fears of a hard landing," Westpac rates strategist Damien McColough wrote in a note.

 

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